U.S. economic growth from 1976 to 1986


Material Information

U.S. economic growth from 1976 to 1986 prospects, problems, and patterns : studies
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v. <1-12 > : ill. ; 24 cm.
United States -- Congress. -- Joint Economic Committee
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Economic development   ( lcsh )
Economic conditions -- United States -- 1971-   ( lcsh )
Economic conditions -- United States -- 1971-1981   ( lcsh )
bibliography   ( marcgt )
federal government publication   ( marcgt )
non-fiction   ( marcgt )


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At head of title: 94th Congress, 2d session-95th Congress, Joint committee print.
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CIS Microfiche Accession Numbers: CIS 76 J842-24 (v.1), CIS 77 J842-18 (v.10), CIS 77 J842-19 (v.11), CIS 77 J842-20 (v.12), CIS 76 J842-30 (v.2), CIS 76 J842-31 (v.3), CIS 76 J842-32 (v.4), CIS 76 J842-36 (v.5), CIS 76 J842-37 (v.6), CIS 76 J842-38 (v.7), CIS 76 J842-42 (v.8), CIS 77 J842-1 (v.9)
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prepared for the use of the Joint Economic Committee, Congress of the United States.

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Table of Contents
    Front Cover
        Page i
        Page ii
    Letter of transmittal
        Page iii
        Page iv
        Page v
        Page vi
    Table of Contents
        Page vii
        Page viii
    The path of dynamic equilibrium
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
    The transition to a steady-state economy
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
    The implications of zero economic growth
        Page 40
        Page 41
        Page 42
        Page 43
        Page 44
        Page 45
        Page 46
        Page 47
        Page 48
        Page 49
        Page 50
    The problems and consequences of a slow/no growth economy
        Page 51
        Page 52
        Page 53
        Page 54
        Page 55
        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
        Page 61
        Page 62
        Page 63
        Page 64
        Page 65
        Page 66
        Page 67
        Page 68
        Page 69
        Page 70
        Page 71
        Page 72
        Page 73
        Page 74
        Page 75
        Page 76
        Page 77
        Page 78
        Page 79
        Page 80
        Page 81
        Page 82
        Page 83
        Page 84
        Page 85
        Page 86
    Back Cover
        Page 87
        Page 88
Full Text

r II I II /I I/

94th Co-nzress

U.S. ECONOMIC CRO\ VTI F1,()i\[ 1976 TO) 1J;



Volume 5-The Steady State Economy





DECEMBER 2, 1976

Printed for the use of the Joint EconmIiic Cim miftee



I III-l -I


(Created pursuant to sec. 5 (a) of Public Law 304, 79th Cong.)
HUBERT H. HUMPHREY, Minnesota, Chairman
RICHARD BOLLING, Missouri, Vice Chairman

EDWARD M. KENNEDY, Massachusetts
WILLIAM V. ROTH, JR., Delaware

HENRY S. REUSS, Wisconsin
GILLIS W. LONG, Louisiana
OTIS G. PIKE, New York
MARGARET X. HECKLER, Massachusetts

JOHN R. STARK, Executive Director
RICHARD F. KAUFMAN, General Counsel









N V M 1::,N I 8 I 97;.
T7' ih ji !f, rs" of the .10it L ,eontofl, m( co/u ,

Cmllnm11ittee st I(l'v Seies (lt itled. [1.5. E c 11011,1 C ( O XV 11 i1'() 1 19,i; I
I., '0 l)Q'ts. l'oblemis. ahd lPatI( ',Y]. iis series Ai' \ ei' Hk, tii,1i+'
frll. aII iItip talita )art of tlie oil roiti <, ( '<+Itw Iiltcl' I' ., I Iit
iii\+et'-al'v "tt ei s(1, wVIi(lI was (t ele t1 ;,'vid ili,-iit I4 t!14
~Iflllbe'-4 of)t (omrres aild to tile i)IIHI at hI1't 4,11 ml the r

of 196), which estalili>IlId tle ,Joiiift L+colmo+ ik ( ,,iiintt'e. I 'p.f-
thait tihe (1omiittek imake repIorts :iitl i'woimiu'11ijit il-, 1() 1i ( '"li-
ml~ 41 the SlIJ)1QCt of 1 n axiiiiizii ( eIl)IjoVlet, palh' ll an jnily
c(hainf power.
V hie )(-Oflllpj)I'iSQ fouri stidie's Nii 1 exaini11le 11, Ii'' !1if)11' ( i l ()t
a Steady tate economv for t le I nit ed State- '1 Ie a iii il i a I.
1LI1lec, Benoit, Prof. I1elman l )aly. IP rof. I ,111 er Tlii'ow. a tt I )I-. ( itlv
G(appert. and Prof. John Blair. The Connittee is indebted to the-e
antrhors for their fine Contribution-, 1)WI) NA w. lw eN1% wil X to stinki:-
]ate interest 111id (tiiscl(RSion ammlhilg (cw1, mid:il+ I w
general public, and thereby to imIproveIment ill public policy foru-
Th views expressed are those of the atthors al(l (ho hot 1I'est I y
represent tie views of the Committee Meniibe's or ('outil tttee stall.
CII tlt' liT II[. i Mti+IPI/0Y.

(h a;in,. Johin Economic Corn m,;t( C.
U. S. Canqress. JVashinqtoi7. D.C.
DEAR\ AIR. ('TIA 11- IAN Jiiie-qtIiitted lier'XlI h I re fit' I~ I. 1> (111-
titled "'Fie Path to )vnanmic ,qliilwri~mi lw I)r. Li I,, ,t'iioit. "I'i,,
I"raIsit ion to a Stead, State I,' oo I I v Ii ler t.a I I IaI l'1 e
1mphi eat ion- of Zero Lel'Illnic' ( ,irowt I," fv i'l'e>to, l,',t "l"' II i \\
and "T'he Piokbenis and (iiXl-e ieii n(ee of :I Si W No (,I pXthL ',',-
VlX" I'v (appel't alloo Tliee font' -4 fo l
(.O.11SQ 0l' lilthe *loiu E4'4, mnIIi>1," Ulilllt of. fli'r4 IlE0,1+. -eI,'

]>atter'tl/." T' ,his -eri',- fornis a spil1-t:t ltI 1):t1t ot i'e .1miult El':iawhi

The 1,,,,, '-t lii(<5 CXaIIitl(' the c'lI'It ()f a1 !ti,:itov -tlt,,' !,I'O)Iti
thle I atedl St ates. Tlh:l( iiamT eIMleAtiolV :i' I \\ liSi '1\ lit "Wild thie p:1t01 t4, :1
steaily stale CC li(,c


,14*1) -III ecoiioni v ill til' 1 (i ed >taes? q':,kei (retl~e, tlie'e four
l~l(, l),ovie a blilanr'ei l r\,y of th~e alv.ail:j,'c :as wel as {lds
ad vi iia jes an~ 1 ) l-,lB dei i ,a iiwou I Il c' ,,i,I )y t I:. tr .i' i ~l I1 to. aiid
i lie exisence o f. :a te:,(lv state eroflOiv.
l )r. Beiioit r'ejects:- l)()t Ii lnipst Picthi( I 'l' :i 1 1 ~e "'>t \ ( V state
o f 'taI~le population andl production. The "i1)vnamnie l){,,iibrin1 so-
1,t ion l ie !I, lmcs involves ii,,ree major poi irvi ('~n ge,. TIie first is
"Ctiier\at I)>i)n--)l lfii'atloii. wlhich e-eit A v i o Vti "euin
11 e ()f I'lonreIplel) iqlatde I1 ,O1 uIWP. TeMrld~,lic itn~t Pi 1h
(ic.nti iC-l ecl111o()cal Tehuaissanee.7 ( )ut havs loi hiiie edu ((cation
arni IL. & I). would b~e vastly increasedl and there would be a shift in
IL. & I ). Iprior'ities to 1)givepiluIry enl)lmsis to eiiviroiieital pmrbleims.
Thie third'o and 11ost controversial I)olicy change lie pr1op)oses is "Nega-
ti ve Po)pilationi (,rowt~i which involves sharI) (lkcliies in the birth
rate. ,esulting in les-s than two children per family.
The paper 1 Prof. erman Daly, a leading advocate of a steady
state economy provides analysis of the questions which often are
raised concerning a steady state economy. 1)efining a steady state
economy as one in which population and physical capital are main-
tainel at constant levels, he presents arguments as t w this type
o)f economy is a necessary and desirable goal and concludes by discuss-
ing the path by which it -my actually be reached. le argues from
the pi'inciples of thermodynamics and ecology that at some point
i)hysical growth becomes impossible, and long before reaching that
oint growth becomes increasingly ly dit andoly. He goes on to
cite three institutions which would effect the actual transitn from
a growth economy to a steady state economy. The first is restriction
of inequality of wealth and income to an acceptable range by means
of simple minimum and maximum limits. The second is transferable
")r th licenses and the third institution is depletion quotas auctioned
by the Government.
Prof. Lester Thurow maintains that there are obviously limits to
economic growth set by the rate of increase of productivity. He feels
ite the relevant question is not one of limits but whether we should
deliberately set limits to growth which are below those now set by the
relevant rate of growth of productivity. To answer this question, one
needs to analyze the consequences of zero economic growth which is
toe major thrust of this paper. He concludes that the consequences of
ZEG are so severe in the current institutional environment that any
serious ZEG proposal must include substantial changes in the way
in which the economy is operated. He maintains that if ZEG were
simply to be achieved in our current institutional environment, there
would be rapid increases in inequality as more and more people are
forced into unemployment and "unemployability." Thus he concludes
that a ZEG economy would necessitate a substantial increase in
economic controls.
The paper by Blair and Gappert discusses characteristics and con-
sequences of a slow or no growth economy. The most general conclu-
ion that emerges from their analysis is that value changes will be
critical in determining the character of the steady state society. They
aie that we are at the end of an era, wherein future historians will
likely chraterize the 25 years from 1945 to 1970 in American society
as a period of foolish affluence fueled by borrowed money. The next

11TOW(n I I I !I
e )Clolilic 'I atiol (i 111( lsnt1 tleIOdY('i istate .x' odiealN--1(O w t I

C(t." I tletres wvliil they lal)& l tle Ilo)l,-iaii i'il if a ii I 1ii, lh. l-
SO~lallfiitutre. In regartl to public pohICN i~ t Ie- I I Ium :- .--~r I
o)f I)oliQv foI'natioi wli~ch wvill take piae TI, aliciulat i h.

which new institutions andtl relatiomihip of th e ;t(,ady I ,i ,iat"','
CliU1'je, e volve, a f(d either succeed or fail.
The Comiimittee is deeply appreciative of the inniovaftiv,, ltii ik'2r
wliichl these authors have provided in t ape per-. )r. Peiiui i I',-
tes-or 14elritus at Colum)ia 1--Niveritv, lroe-:or I)al v is (w) tle
Ikcononucs faculty at Louisiana Sfafe Ilivei'sitv. I 'ol1es>v T Ih ,)i-t
is, an Eeonomics Taculty meniber at -IIT. andml I)r. Gappert i- --I -t-
ant Conimissioner of Ediucation for the >4tate of Jew ,erev a io I I -
fessor Blair is in the Urban Affairs anid Busines Adri ii ii
)-partment, I niversitv of \Visconsin, Iilwvaukee.
I)r. Bobert I). Iainrin of tle ( o L1111111tee -tal is li>),i ,, n
1)anning and compAl, tion of tlhi> study series with s11, ,r Ii11-; aad
as;-i ancefromi other members of: tile T haei. Tl adiiiraile a- i-
ane of Beverly Mitchell of the Colnmitte staLff is also appreciat .
TIhe views exlpressed are those of the authors; and do not Iiece Sarilv
i e recent the views of the Members of the Committee or the Con-
Iiltt(P staff.
Job~ t [' I)vn?, ", ," ,

() N I' I

IAT to r s (if Ira n si lu itta l . ... . . . . ..... . . ..... ....... ..... . . . . . I-I

fly E11ile Bleloit

------ilr~- ---- - --- - ----------- -- -- -- -
I. Why s it i u h! "
IL Hotw\ vould it wvork? -----------------------------------------------
Ill. W hat changes w would he required ': ................................. 10

IB, lIhirman DaI~ly
I. Introduction "Ind s;u m m11ary --------------- -- - --- - -- - -
II. The concept of a steady-st ate ecmi my_ ------------- 15
11t. The iwcessitv and desirability of the SSE ----------------------- 1S
IV. I')lidies for an SSf -.................... 24
V. S e, further questions 11 and swers eolcerni i3 an SS, ----- 31


By Lester C. Thurow
Summa ry 4o
I. The distribution of economic resources given current economiic in-
s titu tio n s - - - - - - - - - - - -- - - - - - - - --- - - - - - - 4 1
I I. The distribution of )roducer's welfare -- 44
11I. Evading the issue ........................................ 45
IV. The influence of other e,,unts---- -(
V. Preventing inequality from increasing .. 47
VI. Impact on governm(-nt --------------------------------------- --9
VI I. Conc'lusions ----------------------------------------------------- 49

By John P. Blair and Gary Gappert
Summary ----------------------------------------------------------- 51
I. Introduction The post alIluent )ro(i ------------------------------53
II. The transition to the steady state --------------------------------5
III. The steady state society ----------------------------------- -- C
IV. Piblie policy a nd i nterventio-,-.. . . . .. . . 77

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J s3,j I' r I iIi"(Y

Man has become an eidaiigered species etid 1tL-0ivd l v* y i. All
Sljics survive Iy adapt i 1, lo the elNvirif lieilt. Mi111 i iiuti tle
enviornment-and calls it progress. But the envioitett is nt iii-
iii itelv adapta})le. and the limI tit 10 ts a pll)ta}ilit v Ire o COiti I I"
iilt() view. We see 1Nw that colAinued tll Iestrit ed -roNNtI1 citii 1,r
o(ni catastiroihe. Yet we fiid h ere that with iiew p)licies '111(1 life styles
w, Cn1 contJinue to raise levels of welfare withIoutt d. 1,11l" the
environmental pon which we and fltu -enealtions diep ed.
()vi onents of unrestricted ri -t h a re oft el ci t iiced as onisdav
prophets". But even using the critics' estimates of pot(et1t I alili,
resources restricted growiii colnt poA> i!Iv1 last n ore t;an on
mr I\w() illore centu ries. Al(d I lave calcul ated thatl if we i Icreased
p)eseit toinnasges of nminerals extracted by only e 1)ercent a year. we
\voi\ilh he ait-i11ialiv ext1111ct i11 1I1re than tic WeH(.h.t of tie i, IIi i t a
thousand years.
The breeder reactor or industrial nuclear fusion. eve(i if practicalle.
will nof crive us really cheap enlera Moreover if past trends ill ii e
of fos il and nuclear fuels (onitim. heat pollution will raise, atuios-
l)heie teiipenat iires by 5) centi'rnade and (estrov mankind d wvitIi
1502,, nearis-if tile more ol)vious hazards of a !pluttonium ii,.n<,: y
don't do it a lot sooner.
Our only possible esc-ape roul e is via solar e ner'..,, in di(ect ,ow
ii i rect forms (Ocean Thermal Ener0v. 1onversi ol. B ioni (,n-
VOYS"(',. Winid Turt)ies, etc.). But we doiut know how iiicl, net
(ie1'(ev We coUlM raise that wayv, t and1 the ainionts o-f R & 1). lein2
founded to answer this all -iniportant (ue(-t4io are r1-iiciflo, 1v i iii
yinate. Tt lookV as thought main. tite only spei e- : Ide to fo im-, + ii t,
l ossibility of its own extinction, is unwillinjc to t ike tle trou >l to
prevent it.
Nevertl ele:F. olpponents of ultrestricte! jrro'li i ilee! ]lot t1 ccpt tllI,
"Stea %' State" of stalde !1op-,tio OH ,md },ri)(!lci il i I ic Oe .IIly IW):c-
sib>e alteltiive. Th 197.1 world :lvera,, ("Nl1 pr, clu:v of uiV
826;.G0 a week is qpite ilnnleIllate to achieve iNau+V lui ,rY ,e>0
r+l" freedom from material care-anl no a eoilld ii ncrTease it. Th e develop iir iou lriiies ,i a11v. w ii:it ) : :u Ve r-
.1re of less than 41 a (la, cant yOSSlil\ -ettle for tlhir !re-s Ut li ii+,
s :un:,rd: and th ey already atcin t' for a i t I of total r 1- D I
worl1 GNP.

7 71 ; 7 +;....

T I I Id PAT TOVI I l D)I)Y NAAM- EJ I I ;1( IIB I I -N If 73

)VIM~t IIw I ~t ic F li la 11 1)t :it I1 12 1 ei )1P -or ai sf
in'ns frt 111 >erC'JCS, leisure, recreational activities, and display of

I ,~ e i ~', I. It wll! :t iJV1reaSe out 'aV Wir hiirl(er educat ion
:i I I I). aI '-i i It t lie 11. I I. priorities to give primary em hasis
IN*, i81 lV(22 l ue 1 f solar PlV 111 var o rms,
Pt lt P iii roll! f 11 ( ( )Ie1'":ition of andI s)stit tions for scarce e-
V et leSl'l e 11o a l(,I s meth-
Son ~ ~ ~ ~ ~ IV; I. -I o14Vc( (.out 'I~e~ wC I Pi tif

odl-s of enhancing agricultural productivity, et cetera.
I'le tllird anti liOst controv'eis'ia I policV change is "ecat ive Popula-
I i GrIwi-+arllelil n t il thle l hi rtl( rate resulting in less than
twosllryVivit( cliildivn !per fi'ainlv. Ills could be achieved, we believe,
by inakinr effective and .onvimenenint contraception or sterilization lifni-
versally available :nd entirely free. by elivninating the economic bene-
fits of large faillies and by paying special allowances and pensions to
t hose with small families.
Such big changes can't come soon. We will first need some major
adversities (famines. inflationary recessions, pollution engendered epi-
leiiucs. and confrontation and/or wars over access to dwindling re-
Stn1rCes) to nmake people aware of the dangers. Only then will the
existing ei'vironmentalist, conservationalist, population control scien-
tific associations, liberal religious groups, and peace movements merge
t i)ei r efforts in a world silrvivalist movement with sufficient political
influence to get result.+.
U-nless we wait too long. the transitional problems should be entirely
manageable. With hi -her costs from taxes on scarce resources and on
pofllution and with the major changes in the pattern of output. we
will need efficient niiana genueit. by private enterprise, more than ever.
Awl uneploynent will by a voided by a reduced labor force, shorter
lirs, anti< t]e; eXpansion of services and new industries. The retention
of (IehmroIratic freedoonis would be essential; power-hungry dictators
w' (nth! +(e11+ oninous news and work for complacency and national-
it-ic 1111l id(eotoyi I )e mcratic Lovel'nments already have the powers (to tax, to subsi-
dlz+. to regpulate. a"nld to set mimimim standards) that would b)e re-
(ti iired. T hev woulld silli)ly need to use their powers more vigorouslv
:11 (1 for new 1)111 ()S(,s. New 1)osjibjlitiies foi- corrltion wNouild n o dlodllt
aIso Ile eeat(. l, nt we need new and stroii gel' n"easiires for (leteHtinU
Ii id letteri fi ('IlI 1" l)t i1 i ii any cae.

An e tiIIII," p)rgr(,es iii knowledge. technology and levels of welfare, but
('111d1 be in t iiiri r with its environment : it wold neither exhaust
oMn-reneV:bYie maerials. nor add to pollution, and lience would permit
+lie .'nt inin nw l,., of l]11ian civilization into the far distant future. It
i-s I'V! It th+at s<,, :i 1,001'a11 1be miti+td a ,Is soon as possible. since
e'.e(,rv year of Iilrel riced ,/Lr

e ~ 1 1 Ii II eL LI I I 1I\ 4I 14 j v IuT4 m
II I I t I Iii

cl','tge. It, il +- (Ir ll tial ilit ellx' 1)01)+tP + + :r, }t+ llb ti: ll gi'oV + + tl+ A-- + ZiiilI
\n t l i ba ti s of rec n ;vd bt I I, ,, Id I ',+ eV t i I t4, N i vit '. -i

Oldnv~l~i i(ol're : tha Io th (' Ttil' ('i-is abu I i iion years od.+it

at10 an 0el arises from vi]lat I. als a vea. tlie las + (t
""rXviii e 'Ally 1nci',a1 in l)V s 110 fii411 iont a enta t riS. bya-

hette tidamtalfy them presented by population(rv-h
olthe poasis of eit ins bv D)r. Mary .lakuli :h evool. Ioent thie

execaton. ndI ~il( sanai.hs 1i0l'~ a l even iiI't'Idji
elduva Conre. tft soco urt id bot theilli yenrs old. it
pears that i the first iio ee r te po ulat ll
t ie o aherahre of under l300 individuals a oear. In the Ias ste P a
it was oin net b an average of i-4 million a year. Acn n d within aI doedt t
t wi be annually increasing dt ctoe 110 inelion a year i.e., by ablt
lialf the present U.S. populationn!
Teit population explosion. colAedtl -itlh tcne revolution of risll-
exIpectations. and living~ standards, hias lprodttwed all even morte ralpid
exponential growth i production d coilXsi)l ptl oile.
The continance of such uirestri,"te growth thretens to ex 1,11'
certain esential resources n to generate Iolltion ttiatel t det I'll,-
tire of hu an health t ind ife. Technology )a do, and ]ias adXe nV! mli.
to fOOndt new and substitute rest ourlces, and economize in their+ (bu.ez, by
reacling et cetea, and to control pollution. Yet aei excessive reli11}e0-
Oil potential technological breakthrougrhs call be disastrous, hy ent-
louracing iCiI to continSe flie pattern of ex!po1le"tial i'l-,ti evenl it'
th is undermines the capat-ity o>f i]l(, elivirolilivnt to support o111, mo>t

tee cn iaI adv"IIneSe V vI1ll*11 lti iateh prove inslarient alnll N wi
Ltaissez-f'lire e,,ololllisf,+ alld ,otlivr'z mtv +illimizodt t Iw,,ul

and th~at p~ri'e ch ancres inl five, iiiai.ket will le,1 to ]n 't'vazez ill pro,-

erence, few t(-r ses government or individlttltls arn 'l i;f11t, +elw
Ir-- vW!t tlev think may ]Ihappenl a decade or' more in the fj, 'Ilt'. AllI
Coh!:in Clark, in a seIIIna ,lpi in S' ie a'e. denmo, trdi'J I 1i+t Ole
Sone fiirthr detnll mav he foind in "Mn t Growth Stop ?" In "ro, Il+r- o1 o
,+ F-+ +, s I Fl+nOr (if Npypiuth lB+opldlit'q "' MI+ 1 1ft r North IT I, TH !l'

i in' tr inX r d 'J1 mtt si:~i' i~in Iu lr ~ u'

S' r

rat ioMI entrepreneur will find it in his economic interest to over-
exploit and exhaust even renewable resources, if future income is suf-
iciently discounted. (Obviously this will be even more true of non-
renewable resources, where no sacrifice of a potentially permanent
source of income is involved.) Thus prices will not respond to future
potential shortages until emergencies are already at hand, and it i
too late to do anything about conserving an adequate supply for long
tcriilI requirements. And while substitution and recycling may play
a helpful role, in delaying severe shortages, they cannot by themselves
suflice. Substitution becomeS less significant as more and more com-
modities become exhausted, and recycling is never perfect and involves
substantial trouble and energy inputs ; moreover with continued rapid
"rO wt~l, recycled materials can supply only a fraction of total demand.
If demand is projected to continue growing at past rates, it appears
0tat existing discovered reserves of most metals and fuels would be
u in a century or two. Critics, however, allege that known
re 0rve 1 constitute only a small pirt of "ultimately recoverable
sourcess" which the 1.S. Geological Survey estimates to exist in the
top kilometer of the earth's crust.
Thus 1Pi-fe-or Nordhaus estimates that ultimately recoverable
re;orceCs of coal amount to over 5.000 years of current consumption,
and of aluminmii over 68,000 years. etc. He concludes that "The clear
evidence( i< that the future will not be limited by sheer availability of
important materials: rather any drag on economic g oth," will arise
fOin increase in cots." (
1 am afraid this is an unfortunate vnon sequNt.r. If demand for coal
and aluminum keep increasing at their past rates of 4.1 percent and
6.4 percent p.a. respectively, then the "ultimately recoverable re-
SoTIrces" of coal a-nd aluminum as estimated by the U.S. Geological
Survey, and accepted by Professor Nordhaus, will be exhausted not
in 5,000, and 68.000 years respectively, but in less than 150 years in
l,)rth cases. Of course growth in consumption may possibly slow down.
I',lt one can't validly measure the potential for future growth by an
index which implicitly presumes that coisuim ption will stay at present
Another similar line of argument asserts that with abundant cheap
energy it should be possible to continue dining deeperr for the
r((JirLiI minerals, and "the literal notion of rulnning' out of mineral
sII)PlIiS is ri(liculous. The entire planet is composed of minerals, and
m((an can hardly mine himself out.5
In fact the entire planet is not composed of utilizable minerals.
M[ot geologists think that the veins of concentrated miable material
are luhrply contIrasti. r with the solid rock in whieh they are
ltibel(.l and that no vast supplies of lower and lower grade minable
ores will exist, after thev are exiaustd. While there are further
traces of the ore in the rock, attempts to extract them would encounter
in lpera)le problems. Jior example, to mine the copper required in
3 Cdin W. Clark. "The Economics of Overexploitation," Science, 181, 4100 (August 17,
197 .
4 William D. Nordhau. "R esources as a Constrant on Growth," American Economic
R rier, ITly 1!974, p. 2:;.
I, l. IrooVc and P. W. Anderson, ".Mineral Resources from Economic Growth and
Worl I'opulatio,' S, ence 1:5 4145 (July 197-1), p. 13.

thevei'~O~)1iw:i '~uit Even. w it'~ tLi 11la.-I (I I xt 'l, vv
Werell :( V a i8 WI I' V:, tti:0 .' ii' 1 l ij iit 1tI I I
\-:nb1 Ill i t i W, 1\\l 4)1~l ah : HI fir vi 1 Iug1 1:1 1Il a 11* 1, w I
wl I 'luel + af'.z i I Y I I s AsI I I K 1 t I I I f, F I I

RileI I-e I t ()LIv i It' t I8 \1 I I ,I v( I iIt J l r:i t I t i 8

t ,Il>) ()bvioIIIv. We ('1t ( to Iiat. i1(1 t (2() \v+ea loo-h I k 1I k II I.(I I .. I,()I
tlIe liract Wacle iaXi11111 [ t hall 1 00().
T+ose whoi tiii t 11('nt Pint w a .O,. Ii iI,' i nit'.+
aiiv ()11111 ]I]&r Oil SOine vl 1) )\Il(1
nen costless eilerlyv with which to mine ever deel)er all( rtiie (' V 0 1
loXj*ei' "'"tlde oi's. I lWO'VerC1 U i{1 the lwee't-si I'e(iu'tw 11m. eve '\ll nli-
,lear* flusioll, if aI'vld i.evel, ajqwa1' likily () to u,, I ve'i (eIi'' "3v w v N,', I
t~e lparticultirl, (At p. lFiv,! (.<), s i ar v iwra++ttlv ks,,Z- Imvw l'.1 t + 11,w)+
capital costs ill dettfi-m inino.ttl(.s ill (' -():s ,J dllive(1 w-a:lde ',Ti(,r,
:1i1l 1)e('8atse o" tle el'l,, te li'i'dl aiind >e' rI'{ P' 'ti I elit t. UI!i
fornis of nttecleal' ener..(_y :11'e tl, Il' to+ ]ive jll_,rll ca:l)i: l 1111d .,+~tit
Costs. (Indeed, adequjlate prt ectio1 an d i u i.a- ie I of a l)lutollilllll ecoiiolyiv !mi' tle vraol.er lea !r 1i+l I (
l)ilitive in cost.)
Moreover'. all forins of iit'l(8r energy >It j wid) ille'irv flm-l fP-o
sile fuels tle n nil1 ('1.uial (isalivalttae of I u nalteiv fatal ,va-l -
heat pollution. A continued grovwti of energrv use i oilli fossilo or l
clear fuels, at pa.4 rates would in 1,50 to ,,' 0 yeants make t lie (1i1 is
too ]lot for hunan survival : )'a]"1roducing ill tille 1 '1- ill avei'a O (+i -
pel-ature of 5)0 degrees tentlgr'ahle-assu int ifrowth wa-s not-
stopped earlier by the melting of the polar ice and the drowning of the
W( rid*S port cities.,
It is for reasons such as these that a continluan'e of unrestrit;'.(
growth p a mortal ti rent to tJ.e cot inuaice of 0o1. civilization-
a threat acceittuated 1)V th(1 danger of major war i tle stmlr,!,'Ir to
gain control over reainliln, stppies of Ili irade raw iateria t-t.
and the threat of inadvertently passing tle t1lirse old where wa ste 1+. ;ut
would destroy the atmospheric colditlons fo slirVi val.
()ne solution favored in pa it of tite ecotiIC literatutre. oi i r I
to John Stuart Mill, Is a "statiolnarv state of stable !o m atiou a.tii
production. I anm >Vinipathetie, but f colside th1is ull'rali-ltie :Ill lil-
satisfactory. 'World 61NP per capita as of 1971 was only S-26.U a
Week, arn atnolult nlowliere ilear sutticielit to filiiilI t!le n it lit io!l:!
health edueitioiial and other requirements o f a ,om,(1 life. No anl iviit
of redistribution could increase that average it liigrllt. indeed. (,onsit-
erablv lower it. And that average is not s fticient to auliieve( iii:tiikiiis
historic quest for freedom frotm material care. Int anv ease. t +e I (*. 1 1m'ed, "Fuels. 'Iinorals, n Id 1iiman Sur ival ," A n A rbk r S r ciwne 1 tii r,
1975, p. 1.49.
SSm' Gr'enflld, "World F.n-r v." Uinited N.9tion. 1970 citod IT[ VIT Nlepl rt ',i ''M a r",
Iinp tr i nt on (lo Ial nvlro i it 'nt.'' 1i7 1 'tIiT a 1 h I I. I I t.I 'ri ,.,-! l, Ixtu \ I 'r, -t ri I :
Ilevaltiint;it Imd ('ltnate V'hanz'," V. & S. All "''rl1' (;eolphyl('fl uln ,. 5+2+ .Ita:y 1f,71
p). 505"'i W+++,rt 1+. A~vrt' and Alllin V, 1{n/',-.e. "l inom riIt' aii:~ l 1Kfb+,(t of ath.:
iiry STteto.'' l".uur( vs tIr the VIzturre. I8' 'rt NI. 9,. II I t I I. e I !
II+ldir.'n h lP l Tleriai l'I tion" In lol 1:'ohngv' 'ied by l1l rt I1'lliIrm
An Inquiry into than uni rose' \V. W. N rr 1974. i 1i+,,'; W. I Nordh .
"I'torlrves :),-z a ('on' traint o11 i;rom th'' In '+\ni''rI('arn Ec'ntoMi' I'vvl\\,'' 1ay Iv +.
anil MIT, "'inadvertent Cliar:te Mlodifia I tion," 197 i p 55 i u. .

wvjil c',rI IHa alt a~~re'' I) otal,ili/et' i ii~iri iiieam, r ilicolu's (of less tlia
:L ilfillar' a d!av I tra:llihi il P1'4 o tiute ~ta'ragt) aut1 tliv tlI'lrad
A:1(w,,ui1 fv a hidi t h t i 'r tli i: !IorlI (N t I.
"[]lS\\i a'tl a 'tl'l ')li uali i'c l 1111W] l'li tii" '-4 ii tetl grTx)\ ti, ilOif simply
> I ) .'rl'Vi w !. ( ) ii I 'u iVa' I 1 1i 1i 1 P,(oi'iIx ....... Neeking UU-
I ,e ~ t'~I ~ ~i IA\ C I io t X iIII ve l i IS 11c II h )1LM- at i n 0 f Il enix io()-

iiWI it a ( I X l~ \ 'Iil ii( i e W i' I rIa i ,,a I ,. i tiisi ltW illt s will )1 i ai A. it i: t is
Iii.at I )IK aiil to acliwvT'.
11. 1 bw W,.ulA Iir V mi

LSC11t jillv I I I"I i i' t I(iuar II vllh ls in )ol Wv. Aithohgli
all are esseliit l, I lia're i-s >(oiiie Iradt'oli bet wet, t liem, b)ut the optilnum
w.mhnliiit Pm1 r(,lna ins to h)1e dliso(ver'd.
Thec first of these new policies I call Conservation/Simplification.
Its goal would he reduce('d consumption of nonessential goods requir-
in] non-replenishable resources or producing pollution. The most
oI;vioHS 1licaitegorv. is seIer waste: the leaky gas lines or steampipes
1ot repaired, the oversize(l, uninsulated housing, the factory or public
utility (lisar(fing its waste heat into a nearby stream or lake instead of
using it to heat a cluster of nearby houses; office buildings so con-
structedl as to require excessive heating in winter and excessive air
conditioning in summer; the substitution of high energy consuming
trucel.s for trains in long distance freight haulin etc.
More controversial, but even more important, is the elimination of
the status-display element in consumption. A very large clump of our
consumption is intended primarily to demonstrate that we have a cer-
tain socio-economic status and thereby to maintain the respect or win
the admiration or envy of others. Thus houses are built larger and
more elaborate than necessary, and far from where we work, clothing
is expensive, not durable, and subject to frequent changes to keep in
fashion, and transportation mechanisms especially cars, have been
largely status symbols enormously more expensive to buy, operate,
maintain than required for sheer transportation needs.
To be sure, display of status conveys a genuine satisfaction-though
this may be more or less offset from a welfare viewpoint by the dis-
satisfaction of those made envious by such display. It may also quite
possibly be essential as a motivational force-at least in this stage of
human society. (After all, most Communist experiments of equal
rewards for all have foundered!) But, in principle, the same motiva-
tional l)enefits might be provided in ways that did not require exces-
sive consumption of goods. Outstanding achievers could receive
medals. citations, titles, lapel ribbons, listings in honorary biographi-
cal dictionaries; they could live in exclusive neighborhoods and join
exclusive clubs, and could continue to receive large salaries the
:111mots of which could even be publicized, and which could buy them
additional services and investments. However, a highly progressive
spending tax, with exemptions for investments and services, might
pIrevent them from spending say more than two or three times the
average on goods.
What measures other than a spendings tax would be required ? Pre-
sumably heavy fines negligent waste, and a ban by a Department of
Conjviiner Aflairs on all advertisements for goods except those speci-

lW O.() A, l ~ lll itilizil tec-, (41 -';Y l~ tl'il- (ltl ll (,.r'l
I> IIIab:iIit ian mrc(i () -t I M 111 Ht )cv (1h l ('y- ) p tI)-

I), V(1V lieavV e (eX(IM' taxes IliIIilt he ) a' e onl it eihs ()fl c(ii)-j)i* P110(1-
,.)).-+) ~l (> 1 i e l (i, 1" ca s, lit(l I M I!IlI W sl1)lh- ,: ) I ;~ I 1 u +(kl to t )+I
-eve l "it ilitv m od el' of c(lot,)(l Ii i initiative Imoi- )I r :It' s. (,ti .
mperatifwit 11 nd m11 majl e(C costs, wit Iila IalII1i11i ( Iublln litv al(l 1(-
p.,l) ., lot e)It ia 1. F in allIy I < ) I- re1)le i II ra w Nv (IIial 1 11.
ireateln to )e ill short SiI)l)lIv ill the (lista t- liiire -'llouIt be lw'vii v
t8x(d (and if need le rationed), withI (roverinent I11,11i t)eilawC', Of
I)rod!iction thrioulli purcliase for stockpiling.
'To m ake biulviiu aIli 1m-ziw ,() )(I a 1,, ( cIll ( al wr) +', inl o r Jix -
( should t Il re f i lpl asis on i ..<11 e a ,i )n activities. 'I'l u
-dionld be a more rapid redm "1ti<1 ini (te workweek. lm,i e)al -fi I
jo)s. and tihe ext(,I11o l of sabbaiicals br all wvorke1rs. And we
st ilmlat C more indivi(duial l> rici)atio1 if) sports, intelletna 1 ai dl
esthetic activities and the a'rts-wit!I sil)siolize(l Coll )4 titioivs a n(l
prizes in at Il letic <('
ferences, and amateur artistic exlibitims and l)erformllances, and oil( -
-taflldifg Civic eontriIl)tions.
Finally, the (1onser -at ion Siimplifcation program might well (I,-
velop a new concept of productivity, which would be based not on
increased creased oltput, per unit of environmental damage (expressed ill termnis
of j ollution, and' /or of utilization of non-renewal)le resourcess. Tiis
Could take into account various negative externalities neglected ill our
)resent productivity concept.
The second major component of DE is what I call a "Scienitific-
Technological Renaissance." This would first of all involve a clnge
in R. & D. priorities-away from military, space, and trivial co)m-l
eristic goals (packaging, styling, etc.) over to pollution control, con-
servation and finding substitutes for, and, more efficiently iiiiliziu."
scarce resources. Special emphasis would be given to coll (rvlt 1i1
himilding smaller more elergy-efficient durable al (l dependable homes.
cars, etc. and the developmentt of solar energV, especially ill its inl-
direct foris of OTECs,'i1 Biomass Coversion. a11(1 wuid triIibi-
smclh energy is tlie only kind substantially without heat )ollulitiui.
Given the new priorities there should lbe a dramatic i nmrea-e inl
governmentt support of higher education and R. & 1). Eveni w\liei
R. & D. was S;o heavily concentrated in military ,lt rreire nsl):c
exploration the civilian payoffs have been rICli'arkal y il e.:r jt
1u vial ion, illiniat irization, (1llil~uters, ( 1)1111 iii ii 8Ii) >"8! elI ,. ,'\\iiil
Il re ei(l p)"ioriti jO IT. & I). will be iii(li( Il)ttalilv (lie 1(10- l)I'Oiita)lQ,
1,it1 Of illveti nieut for societv. ill the lmii 111111. forever sonic ()il-
-wit(ing- sa,,in nii ~l it be ae l1ieved !v st 1.ra iliti),l ele'n t -N.v dI'r ,:-
1 mon. with1 tarlv jobs and con)llorv miulht !1O.llm ) for I iow, ho
l)'lefit little from 1 (lie Ianam' e(uicaii()al jona)(l lv a vit()-
0115; t itele iii Ii il 1) f edlt,.ra t ioiial stall lard1 4 generl.
()utn Therm F nf:i -rizy 'onaversio .. S,, f, unrt 1

(Irtainlv we should make every possible effort to locate, by early
ttsI IInI ali l persoIs of exceptional potential talents, and to mlale sure
thIat their educational cost, and if necessary their livin(r costs, are
covered. Othervise equality of opportunity is a mockery, and society
111a1 he lo sing potential Hinsteins and Edisons whose contributions
mightmore than repay the costs of their support.
"With tle vast expansion of R. & 1). an1I 1ij1ler edncat iou expendi-
tlilres ol Ole one had,11. and the rorolus0 tigh11tenlinglL 1ll) of standards
on the other, the present shameful inadequacy of job opportunities
fbr highlv educated persons would soon disappear. BIesides which, as
we will see. a full emlploylnent program would assure jo)s. of some
tyle, to all. Most of the 1. & D. would continue to be performed by
universities, research institutes, or industries on a contractual basis,
with the government retaining the rights to any valuable patents
that were developed.
But how could such vast new government programs be financed
without inflation ? Mainly 1y revenues from the spendings tax and the
taxes on scarce commodities and polluting processes. Partly by royal-
ties from government-owned patents and publications. But also by
savings on transfer payments to the poor (such as welfare payments,
food stamps. and unemployment insurance), since the amounts of
these would be greatly diminished as the result of the third part of
the DE program. to which we now turn.
The third section of the overall DE program. and the most contro-
versial as well as essential, is Negative Population Growth (NPG),
ftlie planned decline in population size by a marked drop in the birth
rate to a level yielding an average of less than two surviving children
per family.
There is verv strong evidence that in LDCs a slowing of popula-
tion growth could be.up to 100 times as effective as the usual develop-
ment progams in raising GNP per capita.9 Some who accept this,
doubt that a positive decline in population would be equally bene-
ficial. They fear that the violent change in age composition would
after a time result in an increased number of dependents relative to
the size of the working population. I remain unpersuaded by this
objection. The increased siare of retired persons would be balanced
off by the decrease in the number of children, and-what has not been
taken into account-by the increased number of women entering into
paid employment, or full time self-employment, as a result of the
much smaller families. Further increases in the labor force. if desired,
could be obtained by raising the age of retirement and providing more
and better child care programs to permit more mothers of young
children to work. In any case, such age composition adjustments would
be of a temporary character and could not remotely offset the basic
benefits of an improved man-land and man-capital ratio, the elimina-
tion of unemployment and underemployment, and the diversion of
investment away from housing and other population-related uses,
into machines, technical education and other productivity enhancing
Stophen Enko, "Economic Effects of Slowing Population Growth," Economic Journal,
76 C.March 1966), pp. 41-55.

Ill) Th (leNdeeloped cotilli les. thle lwliieii! olf N PG kw br ra- i-ii I per1(,1
(1Il)il' (G'NP aive ii(11'. cOmlitr CVesil. 1)1t NP( is [OirIV acliL k:ilv
ill allyN case, ill ( wdl to) 1)crillit ii(r a s Ill "l\'(-r V I I-v~ l iI t st all~tardis
NNvliile 1'I-(ill ()'OII~iIiipt i~ii of iioll-rciflaccale na ~i Ilahu i-rias a1 al t lie
creations of l)0li1)1i. Ill a(lditiimi, tlevcll wl (mliii riie ivIst leacd
I lie \\:iv or else tlie Ll)( "s will telld to I e)('' '\ te of NI( I:-
III 1) Ir(ed by creloc'i (la1 1i) 10 \-s.
N1CIr will be the iI )st (ifilill of i he I l(r'e tolii. t(i i]iIvlteiiiito.
It requii res two se ,iae lii l I. i rst e ll c.ti V. CO)1I\'e IieIt ali(1 iIl-
exl)ellsl'Ve co tracelti 'bs t'()5fr Ill A I (I :it(ll1'iIe 1 \,ifiat oII
11i11st be createdI fip thire* 1(o thie point where tI lie afle 101111i-
l)er of children pler faiiiiil v flls llbstaid allv below lie iiiiiibelr pres-
intly v desirled. (The uiil)eTr of siil'xivi'li ilil'ei will ()I colrse fall
less than the number of cliildren born.) i(tli tile /echtiological a i
the motivational aspects of the problem pose grave difficulties.
The ,first step may be, to convince governments that large, populations
no longer provide greater military st renli or vorld irillieile. hut
colistitute a. major dra(g oil the p)rogre1ss ald n(lo(de'iIizatioui I] ey seek.
is Well as a threat to their own and the wor-ld's futu-re. Only theli will
4liev ackniowledire tieir 1 iiilt-iii prwmiatalist lpoliees. tiid seek to
change them. I refer to such matters as faniily allowances. tax ain 1
welfare I)enefits ill accor lince with tile iliu1u 1i"r of (liilrell. free edull-
cat ion i respeetirye of tile niml e r of cliill'eli tile per elii tted 1ax fre
Its( of children (especially in II)( irural aeas), as a valltable sori'e
of l;Il)o when they are youn. and as Ilie s(le sOmilre of secuirity wliell
te ltparent is aged.
"Fo cflan,-e this niotivational !tict itre it ,oibl be liect>sary. ill Iil
view o ) offer all faij)ilies with oil V one or iv ( cliil(tieii a Sllbstail tia I
ino)* itill y\ 1 11 owan(e. 1l)1s reti retieint lnsioll" ()I or slipplleil int arv
rt ire )elct pensiols wl efi tl ey are 'a(1 or (iisa hl(,I. A ie, iter1:1-
t lOnal a,..a.en should be fonili(d to channel lehvelollleient aid i ito si II
('hi a nnelQ alnd such i wo-raills could also b 1e finance( liv A'nrl 1 taxc-.
P]ills special taxes on l)ellefits 1ei,,'\ed b lbaiilies roll tli eil)lov-
Iiennit of their cli ](1reil
Fti(alental. however, is the creation of new foritis of c( iit Iia(,Y t -),
thlat uiigllt be, free, c(i meni(ent, ei!'ecti\'e. wit)),( los-il'le ,il i,,
health1 effects. al(] litilizalile under pl-illitlye iv livc( i, lit io)'.
Soiiietliinir like this liay lI)e available witli five years. involviwz- an-
Imial in jectionls of ailt ibodiles i chw h peet ile sj)'PIll l~
l)(netra, tijij, tlhe e,.. a \Voinai ovulates. \\'iili)i iiterferilir ili alV
oRlier wvay with ]her noi'liial 11tll--t1iolniliir.1 l()St lcople ill l1)Cs are !)V
IiO\ ( ,,,',,i .,istoii e to) iiject iols to ('0 1 i disease, at11d I isi. a < w I('(" t IIll
iliietb s Wollld pimeuiiia y b)e lo\-- eeiallv-if a1)("iii1 a ied iV re2-
ilalr ('i-hi palilels.
To) lmtaxililiz, per C )it u (GN lP. l)ili, it v'( )iv i e 1() Ie r(timii I
()liY t ) lie l)(;int \vilere lab mr sliih'ta._'( (l (1 i 1)al it ii ( lwc1 'nt'h -
()f Ia \l ilig ( l" (f.ee l iii l oi SlI'II 'i 1 (e (IN P a' In 1( it: u1w(' t) i i
i Wei 161ii 1'ii s viji o l ()(1 ii 'ti\it \-( 'li;iliuiii. 1 'l s 0 Iilv t i tlit'i ll. I V)
\VI"'1 to liilixililz, l()iK Ier 11 '\(eitf'ire, it tiei li Nei), le: ':ille t4) .11)'i

19 ) ] 1. lt, "F'iist ,to 1 i), i fliv A 1"
197i;, t,971:

7I- 71) 7 C

i)(I latiO l soI:It\V t 11:1 1 thai tII is- in order to iiIuI tuize adverse
1VI~irnletfl etlt't'ts-~- e~leiiaily ii tre redluction ill per capita GNP'
wa- t'() et rite'l '1 1astefiti an, co tlnl)t ion it (ii with small in-
t lIsi ',( t ri )II im)ots to wc fare.

II. W vr ("lAxo'S Wor'L) BE h 'E)I."
('1a Iiv tl-e worl 1d is iiot v dl v for I )I. I ltwI I rlldI y not be,
hl~t il it :I as cxi i HCl'1 hiI a O!i(Ie s Pits (If vi()kllft i101at i is nd 1i indus-
trial receS.i )tls tr )ilii laeri as I> I (rtae. iiajor blafineCs pollution-
en12cn ec t 1 ( 1 11 ( -. a1 : 1 I inteC' t i!)11' ) al (.()t troill it s a It or waIrs
o ver access to i rtIl8 in iiK g:lIilie's of !iil vradle resources. 1 rolb hly
Wlily 1|in ('11 1dild a \ w ,r] 'A i(le' s11iV\ ali. ]1t il)vci iWIt t 1 tIt'(l Ill I I o ) vert-
ii Illllic ojpimii to a re c(-niit tol 0 the need for lsic change o1)-
po-ed by est~ ed ijut crsts.
(Il r(ck)21lition (Ir at'hieved, what t raIsit io l 1)loblIeIS
\vouhld be t n ouiteveI ( earlyy such a 1 -rr ih would reqlure i11ich
stronger gover),nlell leak/ersh'ip than we are Hset to Ile te U.S.-
illvolviore extetsi Ve' au1d vigoro1s use of exit in econoMiIC powers
to tax, stlsidize, is-1e government contractors, withhold licenses estab-
lish stanldar(ls, etc. S141h expansion of government activity and respon-
sibhilIi ty wou ld _reatly increase the 0))Olrtufitimes for corrupt ion and
ouda I for m ist roger powers to detect and pliishm- corruption,
iicli1ding a, major extenllsfiol of pllllicity to for-kely secret areas of
I I e1tt'i 1, and to the finances of governmiIent officials. Any
10tlitioal 0 o1ernlIent 1I11e'uMeralcI required could be easily offset by
the reduction in redundant duplicative government jobs inti'nded pri-
ma rily to reward part was political services or contributions, and jobs
Il aiti-poverty agencies re'Ihered unnecessary by the elimination of
iiass poverty through NIt' and full employment.
If I)E di(d, however, become the main objective, what changes would
be involved ? It would clearly require more government intervention,
to restrain wasteful consumiption, to speed up environment 11. & D.
and to restrict births. Stich intervention, however, need not require
additional government powers: existing powers to tax, to subsidize,
to hire, to contract, to require and publicize information, to give or
withhold licenses (e.g., for broadcasting), and to establish minimal
and uniform standards might prove entirely ad(eq(mate, if more vigor-
oisly employed. Dictatorship would be, quite unnecessary, and prob-
ably antithetical to environmental goals, since most dictators would
probably seek only traditional power or ideological goals, and censor
and n-tisinterpret news of alarmling environmental symptoms. Never-
theless even in a democratic context the increase in governmental re-
SI)Olsibility and intervention would open up dangerous additional
opportunities of corriil)tion. These could be controlled only by sub-
stiantial legislated incr('ases in enforced publicity with respect to all
oflurseS of governmental action (except certain highly restricted areas
of defense, foreia a 11ff:irs, anl anti-crimuinal actions), with the press
an(] Iniass media re'o1nized officially as a fourth branhel of the gov-
erncient, withl a legally enforceable riglt to know, operating as an
ad it jolal ec(k andl balan(e oil the otler branches.
Would DE re(lire the abolition or drastic modification of Capital-
i-;1 ? N.ot as I see it. Modern Capitalism I view as very different from


1)111~l i i te> 114) l>t1111 it' I ialliii>: l txll i'a Utiii'ri hit I Ix i: ,\ ,1 211 Ii ia

Wh1c ilr e Usfl il I I > I I lid. ) iv iit e fe1 :1 I I i I( I I I

it1 wvartiiiie xxlien t I\ee \+a>- lit le gvuxx)iii ii I hle l iv1t 1ttU :tti II tI
ut iit Mitai X ali hll ti hat ulas I tI i al 11 0 vuC nat li ht t ile 1 1v i r.

ters C~ihIile W l l ittin ithe l~iv:, ritlaiuit~ilalltiit at ',t (itllo:i-
ddt e'lect "ye Ieraiid ll I Iil
fil fi ll l t,|l ) a ll r lil v !a l i + t x

1 N I I I) 1 'it p a t I Ia g t a re a(trII e a I Ior]t 1)I 1)' r I > It IteS I 11 11 i ii I I
t.I It t, I Ic 1 I re t i I I' g I lte t I i I It ......... a v 11

as I I twia ( i a ervI I I antIII IIi to xI i w'es 1g a>1111 c \ I I Ut I( rai
i0 1( I hey I(a I i t ) t IhAl l E't) I.t I ) t I r, 1l tlv ie i

t'Ilt~ tvo llIV t etrit f luxuro s(o1 tll r v oo ,+> a Ii l ,1>r127 II:+tV teif +l
i:llw ti lt(, N\ () II It Ic ) re \v a++ I i t 'lc lr tI i lt ( r v, il
VOL 'S. 11 ( ee I )F'd\v I ns I.)il] t I~tta l0 I SII I V III II1 1VIr IIIIfIi t I l}t l

oil ra'w Iefis tiat,'and io I iit Iio adapi dl riv ile r lIi it tA

wa tld e fe Ilitiv s t l I) le l WthilanI ilt) l iii W t r i h"11t l v\ n, .... li- -
it I-, oly (..tsa niti la esl l a t t ae calv l prov d Il( ( ( ~tlljl'l.ii

li lI Itu N)IIeIl l(, vt l eOivi, (r )1rj'O(l.l I l i\e elit t l( lI tI-io~IV I( \'\ li
ci1 lt'es Olnae'- insiel-i('S. iwit co mp leli14te i I i ht ii di oui+it .

r1a e ilS- has1u 1al1ld111e11s thf ca ai'Illo-inaed not~ Il uii:- :'w(1
to rXI ille 4, lt b(' ti Inl the l -cllo t o aV if lliihitl' etl-ia dtl o 'su ii lo

Isti'e effective 1150 e :1 clinic ii liii' lh i 4Vt I' iti \ 1jN mt a
tll. 'tjpoit aiii j a 1 g hsa lar ialallowx to- 1 t':u t (1 iuc I iil an ina'''
calpac+ity to bly~ lu~xtriotts (1*U00e g)d~s andI~ lio l(l" ,,+ t hc, dra tt-
t ially reduced.
Wl'lz:t of file fuix'ctr- ai eimuI 'iAl) it of ('I sh r ct i.lllt ,tiite :I ,w
of luxur~y itenIS. .[ttss Illllipllo\+ li t wouI}ld 1w, l+i'+voi~hlet 11+ (1
ablie on (f oftiselP : But there'( wouItild be anl offtst. T tlt \(olb,t he+ '

l'I,(S \: 11+i l tlt ill e+: ,jlr Ii~ ttlf ildl vlet ic it,, v Ii : I jill ,i

A'I (+ I+It+ i of~l i lllll~ 'll~ i valm+l- <(tls : 1)<1( +> ++' +'Y l
p~rod it('iI III t I IIlta liol a I lot (Itl( 'I f I + l t ( 4, TI. "ll re w,+,(i) I+ :i I 111.

0l t' 1 t l~ tW e jliih:i.;I < ) r it, ll ar ')i lY I I l 10 (.1l( :i ,I+ 1(1 ,! :1 It
'T t I +
s I I I t l l z 't lle I tI I (011 W H ll I+i t':t Ii c( )I f t 1
F 1tt' I It.v, t I w liI W ltt!" 01 11 t1 11, -I II V 11 ++>l 'k i+ i t I+>++ I+

.lct I|, +t I ( I I: al m III + +l I+ I + 1- +I f ++ I J+ I I. : II % i J + I + I I II
"l'b +r:, :I i' I++r r v IIII,*' i+II (Tr M I't jillt 1 1 11*s i +l: tllt }I t + +++ I ++ l ,+ +' + '+++ ++,++
vai!,++l~~~~~~~ ~~~~~~~ ]1)t+l "++' t+p,;+ 1 l yl.l +'''+++
n+It 7 1 T r t ,:t i i1 + I,+ it + +P 1. 1++ r + + r

I )e,-ite tihe l v I full eIIl)l) \Iilent colld e n assrlled only by two
aIlh lit io,,. 1 iiieasres:I i'e-a I 1rad lll i)lsing out ()1 undesirable ili(dustries
(1 v clvi nl')I t al sI a Id'i Is) N\li was eared in with the expaI-
(;lI (if tIlI nw ,[ "\ ve\ idlllst vies (tra ills and t trolley caT's etc.).
A ll 'e.old. the a Mo l imu of a jvnuiie fill] employment system ( re-
4111i1ivl 1'4- ii hcr ilin i,'et r v I ()I, for )E) such as devised by
.Jllc I I. ( IPievs n.A Tlls- wo1l( need to be suplenwnted by a sys-
tIIII ,If Pveve'itiluify -selleris illfthtioii" (in Al)ba LeaIers termiinology)
slulC Is I h1iave 1)vlosed2 ill o'er to will pmllic confidence that fill
tNN wil iiot emlaifzer pve stalbilitvteel)y giving gov-
erll Il(,!t tlie (.()Il til h ice to) nina rI- utee fIll etllph vyIii'nt.
I)E is tileve fh )e alie\'alI le witlmut change in our basic political
M, ct',i),l n1i, ilistiti til)s a l is conipatilble witlh greatly reduced un-
mplovlin cut. It does ir(lui'e liitiIation of waste and of status display
COW-llilpti u. vastly -ore 1 investment in environinentally oriented
11 & I). anld smIall famiilies. Tlis would involve changes in many habits
alid at i iindh,. wvlci are a(llittedly diihcult to change. That is why we
w ill I'r,,Nal lv Cave to experience considerable adversities first.
I however. it is a del lision that the required changes will be easier
if we liv-t aclIhieve move growth. Such growth will reduce available
11'sOl I',(). raise levels of pollution, and worsen the available options.
And e-mi though it raises average consumption levels it will, on the
1lsis of past performance, greatly increase the numbers of the im-
i(w\'elil ed. an( raise everl)oVdys level of expectations and require-
lils. tli(, sooner we call act the better our options, and the more
tine Ave can afiored to take for the inevitably difficult transition-and
the more likelihood tlieve will be that we have not passed the
lpboint of no v'etti n-wh(,r' the p-ol)leis (with their complex economic-
social-political interactions) will have become unmanageable.
Thuis no one -who is loyal to his own species, who cares about the
;ilival of mankind( c- all ord to devote himself exclusively to short
ralnge Con('erns. There is little enough time, at best, to take the re-
(j i re(d action. and a relatively sinall amount of self-restraint and
flexililitv now can lproduc(e enormnols benefits later-one such benefit
b)einir t lat we can set an inspiring and encourarinr example to our
()wAv clil(lren. Pirobablv the most difficult aspect( of the matter will be
to secure international cooperation oin these rIoblems. Garrett
I la vnliius 1Tragedy of the () uoiilons" will lead nations to pursue their
slort i te-l a(lvantages even if others restrain themselves. Unfortu-
iat'lv tlere is not s)a(ce lere to deal with that set of problems. But in
an v Case, it will probalbly be 111) to the United States as the most
1)w)\ well *l and influential nation (and among the most affluent) to
)io~ll ,e in (,vel)pin and implementing the necessary measures, there-
I)Y making c'redil)le both tleir nee(l and their effectiveness.
I1h' T I)v oIt ot er's4 s several I)ooks oil full e loJ)yMeit was "Essays on F ll Eihly-
lit S p \'\' t.s llrcs. M ttn ,hin. 1 973--vhIi-i I reviewed i "'The Newv Relpublic." April
2.'-. V) 7 1. F, r aI list 401 11 thetr books, s, e th41 hooks listeil il footnote 14 )4low p. 1 Is.
Be 1. [I 4' T Ihi I ti Io-I I I )lo IIyIte t Tritde-()ff a d Full E(,onomic Re very
iii ".lri.al 101irn111l o, EefIImics 11141 SwioloV'y," October 1975. reprlni ted as Chapter IV
it A. (,;trtnv et al.. ".A Full Ei plo)yminJt I'rograin for the 1970*s," I'rae,,ger. 197G.

By!! I IE MAN F'. l)AL*

Debts are sbllijet o I() lhie (of ma tlit(iiatic'- rat her iliau dl>i. '
Unlike Nvealth. whjlich k i', ij(''t t) the ]i :\\- (of therllmi 1 idt) a ii ",
debts do md r-4)t w it (od e tllId ar, III)t ('S)i. ll d 1 l I1 le ir1'04,1 s 40
living. )ll the c(uItrary, they gro\ at s) ii('li Iier cc(i! per aii-a im i,
)y the w ell-kn() \v mt Iia t I i c, 1, \ w44 siiiml a ml and I lipmm
iiiteres'-t .aws a ~i l SIIIt 4f thi:L ,imift'litmi lbe t ef, I I ail f Ath 11
(1e(lt we are i iled t, (.#eIlil e, a I ilh,1i urn wlere Ii) l .
()li the iletvreti of their ulitu l i ndebtvdl itv --' -Frederick 12. 1 ,)_(;.

Caln we co eie ,() f a4 ecoll(('oi. )()litical. or s(cial st)'e *2 v,,, fo r tel,
U.S., wlose ,enit'al ('ore is not n alttii)o. implicit or exPlicit of
co'ntinu,al un)lannied. rptlid growthh, TIhis p)(er gie es al aIfi ritl aIi \e,
answer to this questt i(o-the n 1:111 qestil01) raise(l lbv t lie ,II i
co)lltitsiollnigr tle p taper. It al>o ra -is thle colitrai. qti() -Is
cont itlial gri-'wtll ItselfI a fetaible A- rat egv a uilfd alliswer','Is ( it r11'' vtI(
i' ('('onlOni( strat(gv- offei(,l as (a viable alternative to (11tintl01
irrowth is (al led the .st(a-, l-state econoilt" or SS I' for -l iort TheI i,
t'oii'ept, is exp1a i ied ini sectiB)h I I. !but call be I jriell v deliimt1t i- a1
(eetnoiny whose stocks (inventories) of l l)lt)l bodi(s 1 ltvial
('dpita I ( art i fads) are In a inta i iied ( at ou lw cot st at t levels. t1~11 :1 e
Iifrcient for a (rood life andl sust ainable for a lonr future. by l()w rat
of thrul' gi}lt-i.c.. l)v ith at ltes eq(ual to (tea.t Ii ates and pr dilct ion
rates equal to dlepreciation rates aIt lull uut her than Ili-rl levels t I
tttlongrevity V and durability are high. 'tid deplto n plu o
rates are low.
Once n, SSE has b)een define(d the text ailsk is t)o siow wI iv it I "
b oth aI neoc'esa1rv andi des iralt-l goal. anid t hat thler'e exi -4s a feaiII
pi.''( by W hi(1 it av actlin liv l)e reache. I. Sect 1n11 1r it --l i')I the
)iciples( o f theri iolviaiullics and -co ov that at soi' ol)iIt I ) 1lY-ial
))-r-owtll bevcomesi ini)ossil)le. and louii lqbfore realIiii t hat ptt
growth Ibeconies i ucreaIsig lyI I.ifliCi it alld cr 1. l idepeiidt't 'lv. frot
IW t'l n i (11 eaI Pi't ~ pesit is L~ e t It at eco11 l i' iii.(
lbevondl soille politt (doe's not selrx e man-jj. lticrlest eilds. h'I~t ~i l
r)ii(le (s a ( is, s rvl e ( : owf i etl i, t ts e it i e' fittile m. the (If ) r, e i
Ii(crsing 1 in(ltility VWhen dlevot ed. aIt t lit' t ot. It blie i i t ]I"
of relative Nva iits.
To prIovid(la li111it to ecottoluic(r g fX Iit it i- 11W1ltt:r l~
1111 ~tialcosts of a rrt't'ofrah. !trmvthi -11411id r*iM' to hfil ho' ta
lfl:I i4 I 'eoonie eytaul. We l1:u en vtde I( tno'aec IVO l 'Uu':~i Iilt ucIA'I

l)cat ion o)f this tieor'et ieold ptinII or fo," !roving ill al airtight
way lat we lhave eitlie iasset it or 11)t vet reached it. If "ab)solute
SI Iat we ]ave already lassedl lite opt i1uiiii1 is denlided of
,o0 i ri tics. th ll in 1'ai i f(rwtl pwii hrol, eits s1i, lti 1e gie
i eiually im1mssil)li t ask Of 1 i\-t, wIet 01 o t t reac(e it.
w 1 I. ar Nw ti I)o)( Iie Its a re flo'nl even rconi zi I sch a(l I:n isu IV
is ,vYitlt'rt I)V h]t fact t hat f N te l llloe(l iiidt'x of 1(rrowth,
If/1x Ft"l (U)st S 14 1len fits ra hfer I luam sulbt ract in I etll. ( 'onmionsense
arrLi ii('e I ili tihe A)e(cilik, case of (evrgy iii(licate ti ht the IT.S. i as
overslot itlie o1)tillmil. (ur p)er ct-pitt e ('regy (Oisll1l)tionI is twice
(hat of Sw\eden and West G'rinall'y. Jaibt our a verage standard of l iving
is Io 1 ioer., and our iieidccwt' of poverty is 1111(1 higher. The mar-
i)i I )VhitII of more powe I Penerators coul d not be very high, and
Ilie)iii a1m.i m 1 (s()1 s of 1iiicletir reactors, strip ninnin(, and Alaskan pipe-
ii Ines_ is e ovit ouIs. Ii aiv vent it is aP1ried that stal)ility is more
itillu)irthitt than optiilti(:V. Knowin1 tle op)timum without, knowing
iow to l)e stal)lt, is a !)it like a sky diver's knowiiig his precise alti-
tilde,. 1bu)t liot knowii r how to o)oen his parachute. in ( ioosing the
proe'r level of stocks. "sat isficing" is a, better strat egLy than "optinmiz-

T) ('fi'c t]t(, nicti l tnili"sition from a growthh e(coniov.i to I SSE
three Iii) -hike institlitions are si)i.r(r',ted in section IV. The
IIaimle p~lri(c'iples of the-e th1'ee i nstitiitions are to achieve the nec-
e'ssaiv physi cl stal)ility Vwith a ifim sacrifice of individual free-
(14 1 I, V y 11 (lutl rather th ai alibuI)t means. and by means that are con-
sitAnt with our basic institutions of private property and the price
svsm. Tbh1 thr ee institutions are : (1) A (list ribut ist institution which
coi the d he djree of inequality of wealth and income to an acce)titble
na)'e by '( ei ,s of sill)!e lpivminii'mi and m aximum limits. Only if this
1)1051 I~asit (lefect of tlie market is corrected can we rely on the market
in meet ing demograJ)hic and resource issues. (2) Trainsferable birth
1e~ cti issie(d on the basis of strict equality, but in an aggregate
a iiitlif)t ),)rresp)()ndlii, to reIacement fertility, or less. would achieve
iac'rt) stai)ilitv vhile )eriitting nlicro variability in family size as a
e'-silt of (Ii ,fei -I" individual preferences and incomes. The influenceof
ill(1) (' t i (iffe)eices, however, is limited by the first institiltion. The
'i-4ii to e)vpodl(lceA voild no longer be a free good. but an economic
g((., of wilich everyone would initially receive an equal share, which
li(, voii1( J), I'l ee to ex(,ilange. (2) The thirl institution, (epletion
(11101a> aIttioned by tile ogoverniient, is necessary to coitirol the voluNle
of hhsical tlhrou ighlp t anti its dual consequences of tleittion and pol-
iio,) amd thereby avoid tres)assing ecological limits. ihe price sys-
em ("Illa locatee fhly, OlI ell voltiiie of tlh roughput efficiently among al-
Ieriia t ir Vise-. lait it ('11inot be trusted to keep the aggregate flow itself
f rot ('xceedlig ecological limits. The linit on tile dlepition of basic
rI-','il1"'(,s wN)llltl lbe set ill ,,,,,t (jima)tita(tive terms, and auctiolled
ill (liv a, /T'rt(' 1,( t lo 1ne ) tile price system. il tIlonoI)oly scarcity rent goes
It) I hr o0Vei 'Iihit \viile diftereiitial coi i-tetit ive rents min in pri-
T hei r-e-i it il llii rer uclaIi e prices on 1basic' resources
W)u ld 1 .l (.,e, r(so 'ce-sa Vi)i tel i olt)ies 81 ltd )atterns of
( '0( )) ) I l 1 1, 1 )t i m ) ) "t

( lti') l)!81 , ( i )~il x I ,1 t liii s 8r' I) ii.Io I ~i i.t iit- !i< h *t >lork ii I h-iul Ii lcIi(i it-l'
SI ve ;I( t II II

Ilie, itii l li 0 il.ieli 0EV t 't Li )l l I'I --Jt '
: lii ''( i 82 ii~ i l it h'ls\ !, Pt' 1)V I'l,' 1 )!1 i~ 'l' ) (('lid ) \>("ill, 1*; !'l i it: )lt
l ir'e \'(1)s 'totll is e ttall i I \ litl'l l (1 )' ii ei'- 1 li 'o0il> i't )1VI !1-
t (itle 19(6) 'ii',ii Ttu (lit dI, nult1118W hll l; t l oii(): l ofa-' 1l- ii'' '-11'i ( f
l1(t< j\l, it a liiui' <.Zts l( I'iI1)) )(' l iil uiz httjai .i~ id L
Tt to Y I.
f i ii'it 01' )>, lci C jI 1 ('I ii l i >- I! l lt I L-)i' > I it
'I lli'hl a 1v i St o') l ii\t' l l i i t v i liv i i I, Ik I JI I
I t ii I I n'IliI11.jI-Ii I I
( I "I III: I I t w'I;I ]T ( .11 1 w f v w I w '( I I

T el( a :-A) i t c 1it/1 1111 I Y is 1' h(hiIit llg vt i i i t(i( 1r.

',' I t' 1hu
( I ) A\ -'lil tll II()p li tlon of<)i ( i m h)dl (, .ill }(: l~l{
(2l )i it c;i i -t' nt('-i )! I ) I I l i I i I1I I I o t ic, ),

(i)~~~~ ti( ):t( I)t e lt~l't t vv( I I l I tI-I a tII I" I )IIV \\ti 'ilt 'it
1 1( r I II ,t
il~~~~ew It)~ ll t () l I s l t Il- tii tr t I It' i' \ ( t lli tit, I' t F ( w .'
fit p ) I<~ 1 \'1 ( tif -;I l f 11's t('(,ll i ," ) i I I .ra ia. ( I I it il ,i a IIIa I (is
at, I '( ) v l ve ), :-( (~ u (~~r ( t( t Iw tIif I Iw taj is ( I, I' r. ,t I iit l s i ; I ) I ay ) i'\ () t i)_.- V( t' lIn t, l vc -'t .. tiit---i (t t'l w !i lsSt I a* oa r fact
ttile iotl Stio'ck o .1" ill \elitorilV of ti i'l factsi. "i I I()l i )It v ill forlma ilt i1,1 vi,
dhilt. troo(/ne.-S, 1!l iei to. chin im'teist ic dl stI-*'I )li)t n f \v a It aiii I I(
Th 1-l'()mli('t lld(x, ot( are a-Ic() t lie~ concept )f aSS.
i i t i~~iiils ti' )I I ( v1t o t II (I I Iit I f 1) 1 11( 11 p I (I-
V 1'. ()()( alild 11illiiiali lbodti-. It (.(wlrv,-.pmiild..< toi IrI' li |I .-ti i-
I116(i (hetinlii ) (Io of c'ap~ital. anid Ilay h l t\o t(I i ,.
a IlIl II 1) i cai'l. tit I I ii s (Il pa ie" (o f S,,it. I r'i i t ll Ii~ N\\ llli. I it(l I I)-
Oc(_t to) )viler-Alipl.
( S) ;cc L- i' thei .t( ti-f ,t( l) VXP<.l) J(Tii'(f whll \vallil ark, .t-
y\ie'lded by ll i t( oic)k!;. T hell(11:l itl ii v :111 1 liial I It ()1I klt I, I c r i r-
I iIlI e t I w int I II -it y ( If -v \I~vRc. iT ire I I() till it )(w III 1 1
t tidle". N e'veri bvi(,e s we( aill v (l' lli t' WC(I' M*( ,I 1.".i t i o -ln ,I! ll( I
11 ( r I I I iZe I IilI Yc I -i I IZ ilit(em- it ics t tlie (.Xti '10tt1' ,,(i\I ( I,-

t r'
11 11 altI(( () (I it t)' i ) i li li' ilh t i i h it :11 1 i 11 1 vI) I f ) vI '; (Z
lii( i~lan, Isi i li ( 4 I()w ;. (1iVi( (f iiw .) :)1 I( 'll illi 14i.
t h ( ol lin ) t( -(w ei k 7 1

The relationship among these three magnitudes can best be under-
stood in terms of tile following simple identity.
SeNrrice service Stock
Throulit- Stock ThIIrouIgh lt
The final benlefit of all ecoionlic activity is service. The original
-efuIl stuff required for yielding service, and which cannot be pro-
duced by man, but olly used up, is low-entropy matter-energ y-i.e.
the throughput. But throughput is not itself capable of directly yield-
ing service. It must first he accumulated into a stock of artifacts. It
is the stock that directly yields service. We can ride to town only in
a member of the existing stock of automobiles. We cannot ride to
town on the annual flow of automotive maintenance expenditures. nor
on the flow of newly mined iron ore destined to be embodied in a new
classis, nor on the flow of worn rusting hulks into junkyards and
auto raveyarlls. Stocks may be thought of as throughput that has
been accumulated and frozen in structured forms capable of satisfy-
i nr h 1uman wants. Eventually the frozen structures are "nelted I y
entropy, and what flowed into the accumulated stocks from nature
timen flows back to nature in equal quantity, but in entropically de-
graded quality. Stocks are intermediate magnitudes that belong at the
center of analysIs. and provide a clean separation between the cost
flow and the benefit flux. On the one hand stocks yield service: on the
o! her hand stocks require throughput for maintenance. Service
fielded is benefit ; throughput required is cost.
In the SSE a, different behavior mode is adopted with respect to
each of the three basic magrnitudes. Stock is to be "satisficed"-i.e.,
maintained at a level that is sufficient for an abundant life for the
pre:Cent generation, and ecologically sustainable for a long future.
Service is to be maximized. given the constant stock. Throughput is to
le minimized. liven the constant stock. In terms of the two ratios WI
the right hand side of the identity this means that the ratio Service
is to be maximized by maximizing the numerator, denominator
constant, while the ratio ThIroughput is maximized by minmizing
the denominator, with numerator constant. These two ratios measure
two kinds of efficiency. Service efficiency (Service) depends on alloca-
tive efficiency (does the stock consist of artifacts that people most
want, and are they allocated to the most important uses), and on dis-
tri)ultive efficiency (is the distribution of the stock among alternative
people such that the trivial wants of some people (10 not take prece-
dence over the basic needs of others). Standard economics has much
of value to say about allocative efficiency. but treats distribution
under the bieadin" of social rustic rather tlan efficiency, thus putting
it on tl' si(Ie lles of discipimary concern. maintenancee eW "fficiencv
(Tlroughiput) depends on durability (how long an individual arti-
fact lasts).

relae.I whli it. fitia liv. (Io4."- wear' wit J.A aI~ (;11111 11)(T (Al ti'c' I iw .'-
111'4.' tt'(" he iuiiil'"i' I iiiiils ()I* iji' 4i Jti V( hu W ic'u a l,) l) atf :) ii*a tifatt
Aii'lds its !-Q.,i&.. whle -,erx i'e eflici(,1 lICV 'y'- eI ie ie uteu-itv (d
titar service )er tl(lil o 1i.' AIliteIl t(,o'c ('licli('icy u(v i-lnuui cil l t I t l.
1 '(),c l la w of t Iher, vI l ia ui('e ( n()t I I u.r l:u'-Is '(w)1'ev(e (-\ (er Ix\ lun
NA-,ar-; m i) ( 'Servic'e ellic'ielic *v il):iS" .once.(ivab~ly *iIICI o,': >(' fm)'(vvej 11WO(
tlie I I (q-()N\v- "'II'.r111 it ( l(' t II(' de-ie 1 11011 li y'ie.Il. IIer' nt u ,. Imv-
eVi Ier'. l vsi I III i Iit 1 11 of,.I t e i ()I* Iwl l uI\()(, l (.i( ') ('(
service(. 111t.(, tilt, (ot theiSSE)is I)I tcr(, (J
41811(t t 11r)11l11)IiI. anl i- no0t afl'c tcd ).J w ,they n) -eivi,(, (, ldI
i 1IVI(II-4 i)i(defini t v(IY.
('o 1(cl c ally it a I si)er to) t lik of stock s the 11e'r i)('8 )1l I clii'V
'81i,1I)le to I (li rect lN. co.nt 'oll(l 1.4.Ief tI lly l..,wIIti'. '- w ill h I eul\I
i I I o 1( i)4 4.ca -I(i r t) coni rol o IuI III roll U )1I 1
(iiect Iy, anI aa 11 0I t he si ock t( reach t Iw IIIIII it I level aiaa lie.
1)v th fllJXed( t- .voi 'pI'l liii> pe.sevts It() proi')llis.
I,}1 alove (on(et)(s allow us to miake a1 imlo)'tal t (list 1)101!i( )o-
t ween ,.rrow th a1(l de velolpi nen (Growthl r''X 'os to al1) in ('',as, in r'-
wcelta rc.imlts froi all H1(141 ae ill Aock onid 1t lo'111111. xx Ith i lle
tw xo flie.iteiev ivatwl 105(olA- :mt. I evelollilt r4.'eI'- to 811 liwr''5 III,
thle (,flahien(,y ratios, with stock coustfa)it (or alie nu lively. a i: iii [e1,-1
Ill ser'XI* vic ith tlIlrl-illlt cms~t it~gIheise defiiiitMS WC,1 weilt\*I
sav t hat a SSI (evel(ove )s I)1 loes iiot fl'()v. ju' i I la- the ) t id ciar'l .
Of 'wl!i('I it is a sIl)>V'te11 develops without growing.
Ilow do) tllese ()ce iel)t5 r(eate to (TNIX, the more convent, jia)l i)Plex'
of '2Iowtll ? (,NIl iakes 110 dist. int( ]Il 8 (1)01(L tie dir'c basl( lls.,:-
i1(l (,s. It si upl- a(l(1s 111) vXal1(e etiilnates of -O4ii( (,'vi'',s ( ili(,i'('
of those assets that )re reteo ra(ltr than I1 ''l>e4. i1)(,el (lin truii)ii
Ileoi(,s. aiid olnittilig I(, servies of all oxned ns-rts ] ot rented (111r rif
I lie (liITO'Iyear), 1)1ls t1e value of the thr(o)ll ) (it flow (11aite)ian ',
o)nI reI()lace ,lililt eXl)enld itil'es re(ll i re(d to 11 I i (Iiit t lie total ,>1 'k
ilitlet p ) l is t( v ali' of (u et n adolliions t o A'ock ( let invest I)1'(it 1
WhIv:t sense does it 111,11w to ,(l(1 Uli) I)e1(,,lIt cost.,. :nd ( in
ilivxe)to*v? I'li ('ll cnelpt of a SIL is i(ldelpe(l('nt of ( NIP. nd x':v l
happens to ( NP inl the SSE simply does uIot twitter. It coil' I (Lo 111)
o' down. Th(, l),!la\iol) i 1ooles (f sat V viii 14),' :uiu md Ili* *, *
t!ir)n l-)hpt woubl tend lower ( N wl1ii) ) vhll ,i ow ir ,"-,'S I' r I,( ,Nl
tendi to r'a1(' it. ()n bh lance, (,NP would r)):1ldiv full. So w!a',t "ik,
best tili)i to (10 with (1'N I is to f1'or(ret it. t)Inl reole it N ilI t w()
S()earate Socital ac''olints, on. Ilwasuring the vall, ()f se'vice ( heIl ,lit(I
1141 tt, other 1)it (.r t Ile va.flueit, of t II(r)u' lliuit ( -()o ( I. i I s 'S \v8
(OsI 11 ,Illd'b evi kt',-) c(m )e 1 be u)l)a:vl. (lt in id I. huH ni 1 '('fIv I:Ite 18i'4)
loel ('0tl)n1' ioli Im 11 t aIll ("- e(1t ial, ,ilc ''211dll of Ilow it tlrfr-
out t~whe blm~vioi' romdes illui the sauile with res-pect to eoicl (if ti'
I hire o 1 )85jC ill~lYIit Ud4le. A 'p1 eY:t'(co)1101111 iiili~e- "'hboulol )4 I treated
with ni 81ioH.lice hO'ee are oa~ 1 vx:uxs -,wnile I ink 44 otlpldt beji cvuxi( It
IIh-0 x''oild ruilie- il, Idex. 8ll in li- I e''u in ''Il-itici I. fI'lt :!11141111!
of xN' -i(e fl at hi:-' (ei ).i(iliol i) t e 11, 11m f ) .,r,,:-Jilt (; N P H
) '(lv :, ir()),))),' I. 1 xi ))zi .,," : ) ) W O W-)(, IW IM i). '))) ,)),

\ ,i~t)her t In' c(' n'm pt nlow ihe im, lit f )' 'u i )o,)Vx () )teI
M ill 1 1, ) di-i'jIi-(,d 11!h, ,.())'(.j il i l is f i: ,wouis clh rI i' "'()) Ile he

7'- 715 7 C 4

t loia rv -tat ". II isli ,cal ly man h~a> Iived for 99 pIer'ent of lii tenure
Mt earitlI iIn c)lditI ( ry I oe (ly alpp-)xinating tlady state. Eco-
110111 w a lli-'IlYIhe On1 o of the last 2H4H years. and
oIly ill tlhe last 1() year s has it become t 1he loinifnt roal of nations.
Ili(" SE'" of the ftitire can he much iiore comnforale tlan Il th the j)ast, tlhanks to the deVeloliulent (but not to tlie growth) that has
taken Iplace in tie la A t w()
111. Tii NECI:ssrrY AM- I)EsIuArT OF iuIe SSE:
It is one th11ii to leline I COlicI)t, and soli(iihig else to show that
its rea lizat ion is 1)ossil1e, Ihe!e srV, and desirable. A g(od(I start in
hLIoint for t is (tl'ft is l-rovhled by thte comiventiolnal text b)ok definiitioi
of ecoiiilcS as the "th4 Illv of tie allocation of sca uce meins ani1Olug
(, nilpeting ends. where t he object of the allocation i. tie niaximiization
()f ti lt atinine)it of t hose endis." The rather ponderous definition at
least has the virtue of eniplhaiziniir tlat econoniic<' fundaliiiental cOil-
TIli is with ends and lielals. G N I prices, elasticities, etc. are all scc-
OMlaryV and illstriliienta l to the basic task of iluigin means to satisfy
end(. The growthh debate" and arguments for the necessity ind desir-
ability of the SSIE caii le ii11 iiluiiinated by (a onsideration of the
total elds-mnlls spectrum.
Ends-eans Spec trum

r,,+c g5

tiV)S Wk('RPAA/TkR#c, 1W

At the top of the spectrum is the Ultiniate End-that which is
gontli n rominy istru
i ntrinsica 1 g.ood and does not derive its boodneis fro anl y iensu-
Ilielital relation to some liigher (rood. At the bottom is ultite means-
tile useful stiiff of tie Illiverse, low entropy miatter-enrgy. whihli
c11li T f )l hld be i l\Iifand 1d 11ce cannot be the end of any human
ativity. Eao'li interiniediate cate.ory ii the spectrum is an lend with
reslp)cwt to lower categories and a nieans with respect to i igher cate-

0)i tie left t' Sperlilifil li4e a\veI wi-teeK tItJ f ntil I L-.'iI:!!I

w l e~u -lelmIn- l..\s, oill liutils a1 v e levI iiel ant)ll mv Li'' l\ :t:. l,1Iit-
dih1O1 C i l~v~s. l~j l l 8 1 se i'ee i eal
lIoicu t of de oor tei e l. ~Veetir am! teli l e-l I eX'! urI ,l ( (iI(', IIi,
0111Iv a twhe vy lI I O t l eiii> U 'wUh ezS.

ever more iIterkIiedlite \ eaIs ( storL ) for Itle I ll ) of I'>lli-i-
ever Itore iiiteiinediate eIs. ()r io1ox wI I III eI VQ1,2hize-s
itmt I)Urti<'t~lal Le.-Olt~tte> il~llt l lilflit(l. I1t 11Oe it t ,_, I )I' a
treit'al 'd':, iwiiiv of" all r('>,oII17e-e ltret her ( Banett aiitl 1\or: ,. l9(;;.
Ile). lit 'l-. W l: l dcInIoI(I i (Xt 1'l: (WoI. l t> lM- 1~l'lI'e

illdivihluIl, Bittt newv wvaits keep eiiieri'gn" (and i x'el~el a< v ,hl ) .
the ,agi'e ,,ate. of. hl jalle ." ort imut-
o I t%1 1
hilt il ihliil)V1 1 h t 111 intehlsit V+ jl'! e (r1E2,\tlI eeo< lioiit x i-l~tV i+-
S(,/1 IIV I I t v v( velI ,I x
o ~ ~ ~ ~ fv Ioi l~I01 1)~4iili it inti((ciIt wii : 1 I 1IW- t 1 iii' I' (l):I
)rcv o iltiite laiv) il oIe tj va ifvee oe11'ieit

\vIs ( tn tst ra." I ( a l I itio frot'1 the 1 lisrved I Y tI
11II i(te eaIs )1 I I InIt wnd e I l> grol Ifrv .

A l eft ot te IilIII le il e> of I l p iI lI i 1!'.
gi'es ItI vw tv Ilie' ,tI I t l)e I So1 e Itwi 1. It i otes Iw to ra I e (I II" II-
Itoills: () 'litt lpreeit el., are ur vcIiii :Ite I .II I I al a e he I I mI
ited in ways that IanIot Ice ,I I lv telu I. oI .v t2) \ vh tI i I l I
II Ia t ie or the) ( 1l1- ina I'd )s IIII IIv It I xth tt.( 111ii 4-1 1 1r1lv I II I I

fth e I IIit I il l ig o iIIt I t le jat ei ale v I Io tt Ile : I ti d 1 1 ....
ro',itlxC.O pcl tI eri t e Il : d "tim at' 1 1C I. t r t l:\V Iil I itI I vc l-
I c Ict r x 11.II ar i:w 1 l I I~ a c wi tI

di\ils teca I a i ', iit a r e l vwm. i t lie.lu r di Ill I c o t it *i- I I i (t .
lilt- I S 1/ tf I lt I I tl< ,cii'e it '-!1 Il \ iv I I iit'a i--tl ibiee I I lIe I ''-t i i
fore2-Vth rolol. atte io.F \tet tW "In iite ccbl lim- e i~hii fm ofh
ml -' v at th1 \e o er. herip leltt()I I Ii s:hii 8 \V (I IV I I l 14S
it Ihil(I eehion i YI .o M),~v Ii. w hin i'- lie -i the cre-mt'iit aoi
VI, 1a auo0a1 1 v t..rrowdi te mcarolli isto(.-. fori I h pe u rp :: 1 (dit'*i ~ IunI

1). 1 ). of'll otllit lo d Is:thi'ie ii la e i o ii -iileei v altn-a l- ifi 1m

th ait 1N. i silte l- iu atit i mtht. lit cal ben t iidie fmti mtlisIi. le't


11-4 ,',nsidlr in 1.ore detail the illl)lications of paying due attention
to i he-e tultimnate poles. Sice the suI)ject of ulti mate means is more
concrete we will consider it first.
Fr'oiI a l):ii, lpanciI of 1)iysics, theriiiodvnanics, we learn that for
Ya11ans '4 roses the ]lti mate u sab tliff of ile universe is low e't ropy
+atter-ene y. What is low entropy? In terms of materials low
ei1troP0l Inca is st i'i ranlotmnlv -'attered! mloleclmle of any Iuater'ial are useless (hitrh
eut-ro>V ). In tern m of -nier(-v low entropy neaev-s capacity to (1o wok.
Of' ',0 e i-at ed. relatively Ihit ih temneratutre enerv'. EnerNv (dispersed
in couiliiribinn tenilmeratlre with the general environment is useless
(lli! clitro!>y).
X V+ W two sOt IrPCPs of low entropy: Terrest rial stoo!s of concen-
trat('d liliierals. and + the solar flow of a'diant enerrv. The terrervtrial
source (Ilinerals in the earth's crust) is obviously limited in total
:1111mo111t. tlolll thle rat, at wi ieli we luse it 1lT) is in Ir0Xelv sill)Ject to our
c!loicI'. "he >olar sliicre is pi-actical l. limited it total amount. lit
strictly linnited in its rate of arrival to earth for use. Both sources of
imlti imato leais are liinitedo-one in total amount, the other in rate of
iise. lti mate means are finite. Furtherimiore there is ani enormous
(1 iprop ortionl in thle total amoiil-St4 of the two soi rces: if all the world's
fossil fiiels could e bl trneld lp. they would provide tle energy equiva-
lent of only a few weeks of sn liglit. The s11 is exIpec(-teld to last for
another five or six billion years.
Tii raises a cosmlically evmbarrassinr economic question: If the
solar soiree is so vastly more al)R'btdnt. wlhv hiave we over the last one
lunm'ied and fifty years shifted the physical base of our economy from
overwlelIm i nr depeltence on solar enerrv a(111( renewable resources,
to overwhelming dependence on non-renewable terrestrial minerals?
An important part of the answer is that terrestrial stocks can, for a
wi mle at least. be used at a rate of ianns owit clioosii -i.e.. ranmdlv.
Sola r enwr,_,v and renewable resource usage is limited by the fixed solar
flux, and the natural rhythms of growth of plants and animals, which
iu tuirn provide a natural eotistraint oil econoil c growth. l Vutgr th
( ho l1e speeded 1 evon( tlii.? inome ('oistrai it, for a tiljie at least, by
(015l''11in ." cpi' (lown the reserves of tier-
re.triial low entropy. If tie object is high Po'owth rates now, then it
can i1 nost easily attnined 1)v 11s1nir '1P up terrestrial somrces rapidly.
As gOwth results in 1opllation and iper capita constimptiont levels
i liat are beyond tihe capacity of i'enewable resou rces alone to support,
ti tenVwe fae e'veIt greater l)p'ssillre to coitinite con.isilit in eological
cal )i t a l.
Tli i# du iffulty is t--o-fold. ir irst. we will run out of terrestrial sources
evnIt mun!lv. Secmd, event if we never ran out we wolvidd still face piol)-
lem, of ce ter-,,,,erv. E;veum if te<.ltitlos(yv were able to louble tile flow of incident
Sol I' ee I' +v (I v far tle dle nest source). the milliios of years of past
cvo III :1(mal'-v ada 1,lhatiol to li uslial ratte wold make a dol11itr of
hait I, Ilttally .atistrin'o}hini. Ilie wolle !bioslolmere lhas evolved as a
( om 1, tv1tn 1 a ro,1nd tle fixed l oi t of a y'ien solar fl x. M;dern
m' ll tP', ofl s)e'ies, tli-t 1as broken the solar iuicoIe budget. The
I Tho h i-, 'I i rn!rra pji, Or!\ heavily ,In tiP p1 eerimn works of Nicholis GC orzeseu-
Ilkov. <'n (1'171 K. E. 110o ldi, l .(1966)" and F. Soddy (1922)


fact that l i uai h- as it siip lellwc lted Ill" fixed .,olar ilc',,zeln ,V ,uI.)IIjI i W"
terrestrial caliltal lhas I I'r0X il in o t of l(4halatce \ 'lit l l 'cl c f I44 ,
hlot II v. As stocI'\ ks ofl art i faIi cts a i I( I pvpl aI I: I v ()I,(). v I I I 1i _I I

lput iicar we r I hir iaiiteiia'iic l''l: in to ''lOlX v i ,Ini ,I'
I)It Ie c-- e I o ly Irm I Vli t ilI i rI' ll( lcc I I o a lX\ I II1' I
al e iit( the .I Iiimrliit p)IIlIsI loll. N~It ura X\Jl'tIle X Iil h' JmI
"MI OVrlo.1dd. lvoiar ar CxcdIldtroi
s l I ntoi ~ t ii~~ \\fl whi' (~ t'.! .. 1)1. )Ta d Iii Il1111

together is always greater th~at ltlie tot a] e'Ilit ropv of all1 ii~p, ;,Kn'
t)getleI '. NI-p I eo l lit g ii;IuCall et its )WII ou ItI',a( I l ie, I iP li, 'Ilt,,.ll
('a i ru on~ its owi i exhta st 11 f h!e outl)uts 5Of a l ro M e5-s w\er ii fI 1,x+r
e1tr1C ly than the iluts, once l ilts aii! oet. I)s were ;1','OldI I
But.W :11-c( ave a) frivi'l'5 ti( Ia vqiolat t oiiil Vo eii

nainius, (i.e. a l~erle"Ital toll ital liie)ta anl sot far no sucjl l)(,,'1
has ever Nee observed. 'echi ology itself "en tidls ol t lie itt( ) ate,
nIIens of low 'it ro)Vl. If low e~itrof sopuces are wt litiited, t then
iiither is tchilolonry.
It is esiecialy ironic to e toll by g'rX-te i 1 Jost'lds tl at techlm -lv
Illide (l ille a ( p elp et 11 lo ( I llIc il 1 .'.1 S f I() l Ich
frsever been foi eren17~lence tefdeed )i h ltli
II(is flo enrp.Ilw roiiv rsoure t C' a nit t liied OwnJ

1 963, p). 11). It has ill factd (101 tile opposite. Mod erin tech no- )orV I l;Hs
made us imore dependent on the scarcer of the to sources of liltiliate
linens. In view of the popular )elief in the onlli)otelce of teehlnologV
it is even more irolic to recall that the most Ilmsic ha fS" science :.1r,
statements of impossililitv: it is inmossihle to create or destroy Ii uat -
ter-energy ; it is Ipossible to have peilpet nal Iio n : it Is ii}pos.-ilbl
to exceed the speed of light; it is impossible to ileasisire Iilien tIill)
anal )osition si iult a iously with Iigreater acc; racy. et(. lhe ren I Ilar-
able success of physical sci(,'ie ~i s bll eil ii)1 s11 ill i ea ire d1' Io
its inte!ligent recognition of iinlIpossibi lit ies a-,I its refusal to at ellpt
them. Paradoxically tlhis success lhas, ill the popi a li Ild. 1Ioll IAO'lii
as "'proof" that nothing is illpossitl).
The eitrop ii law tells us tlhit wienI t ecilologv i'ease on ler in
one part of the universe it nuist lrodiice an eveni r'eatIr aiIoiiit
dlisorder SOnMPVI'lR' else. 11 t hat "'s nlwlerv clse" is the sill I n, it
is for. li't iire S techilolo-v :1iid for n '- Iilt M11:1 I ire lI ivt I'" I
technology) then we need not worry. If "'sOHl tVhre else" is her, oi
earth, as it is for technologies 1,ased o)I t ient i:l nuilicra I dt+l,'pits.
tiell ve ltlaI Ibetter play close attention h'e tlll'-mirhl lit tl,,w Il:li
aiiis or l 'l lit' O1'l('F l t lio tll' 'iiiit r'.11 NV. I s 1 +1 11 )
"cieai"i' I.,,, is od' i l~ the i' o t In irl X ril :a> al+
orf deI)letion a-nd lltion. There is a-I ilIit to 114 mXV i .uch di--crit'i r c.:Ill
1e produced in the rest of tile liosJplifh'ra' and >( ill Illow it to) fid ,lt l
well enoulh to coit iliue S lpport litr lit' hi lil 1 SVSt 'hii. There H1
a limit to loXw iiiucl of tile e'cospliere call be co,,verted into ieliii,,
Althiloligi techlnul w 3v calinot, 'vel'-oli, the lie its lie re Ilisci I-sM,4lI it
'ould fichiee a much i etir atr,.IM tIll( l oHt t tei a cou l tt .
1more1 ill laryliiii Xitil nttire5' clilg th'in it 11:1,- ill, the 11:1st.

lilt 811 iIl) V(, I t,(.!Ilv o -iW:1l wI III f)(ltioI to liIiiits, while cer-
t: i ii ," l >,-si! !. i' 8 d (t(,si r:]i le, i- not l ikelv to I0c f thI om n in a
:"(). ii 1 1h e',tM ii illi ('N .I 1 11i t woi lId rather ni nii i X i-e tiro altI -
)1l i ll:h11 Im t e it. >it'l I iill ,M rovetnent is nii t uclh n 1I(w, li k ey witIin
i hr' fra ii,,Wik ,)f at S where )rofits wouh I)( made from (levelo)-

IA t I[-ll'- 1 Vt ilc lie zu oSI' f i11ililitte .1lea1 tl IIiP to a dliscus-
ii uf tOw, lit i ltide Ld a1n.1d tle w iys in whlil it limits the desir-
~iIiV (1 1) 2?!' M\VtI.
ilfe le 1r ()f O I'1leii aie resists any (liscIIisi(n of t he Ultimate
I'"l. l'Jv(e,'gvY 'Il l url)ose, tile oinlnt (oiets of an earlier
til)(e. 1 r is]le(l fio a t ( f i(' i ehanii istic. i reluct 1 .i positivistic
111(, l i il I lnlei t(dt c(aile to be ilentifie(l with tle most recelit phase
( )I U ('V(liti11l ( t' i(il(e. Ic(noi(is followed suit 1y reducing ethics
to tl,, I w%, ( I of p)eS( )ntl ita-lw(,. I(ononllics 1)ee e tle "eneclhaniics of
litiity :1iwl S-1 f-i ItirI'st." in ,Jevos l)llIprase. No *!)olit V Nc I [ il1(livi' it I )Vrioritics are right (w "NVlIr. or even about
l:)x li ,v :arie i'ii"n-Ille. Wlat:tever happens to interest the public is as-
S1ni 0,toe I) l l tl,,i I t lilbli( in1telest.
()ill- i io(le n i efisal to reasoii a)olit the I tinate End nerelv as-
I yes t li, ilteolieuiie (f ouI' 1)Pioities, )oth individually ,roald collec-
tive lv. It le(ds to the tie tragedy of Iflerinian Mel villas (aptain Ahab,
',;Se 8 ~t~l~ea wef'e all atonal, but whose purposee wAv"s insane. One
('a lilit h'i 1( rantional ity t1o the reckless l)iirsilit of a white whale )y
1U)intiiig to) t11(, soplistic e'i.il)I0Xc1. iY) 0o io'e efficiently that which should not be done in the
first place is a very perverse forll of progress. '
What is thle lVti te En'Id? Ihe question is log(ically unavoidable.
BItt only a iiilliiuillnl answer to such a nlaxinim questionn is liklv to
(Oiii) (11l lhi.iiA ('oli eilsus. As a inininiuni answer let tie suggest that
wlitevei- tlie Iltiniate Eind is, it presup))oses a res)ect for and con-
tinwi ion of ('reation and the evolutionary processs through which
(G'o lolams bestowed upon us the gift of self-conscious life. Whatever
values are )ut in first. place, their fur-ther realization requires the con-
ti niat ion of life-the surivival of the biosphere and its evolutionary
l)i<)('esses. Tliis iH iniiiin answer begs many inl)ortant questions : Sur-
vival ind (volution in what direction ? To what extent should evolu-
tion 1 iintl ielce( by manl and to what extent should it be left spon-
tal,e v'ery high in the ends-nleans hierarchv, and consequently any type of
groMwth that requires the creation of means that threaten survival
slioul(l he forbiddln. iNuclear power anod the "plutoniumn economy is
a prime examnple of the kind of growth that must be halted.
Bu t wlit about other kinds of growth? Are all kinds of physical
gi'o)wt Ii siject to desirability limits? Is there such a thing as enough
in the iilateiIil realni. and is enough better than "lnore than enough"?
Is -'I ore titan enough" inimical to survival ? Certainly all organic
iieedl cal l(' satisfied a(1 to go l)eyond enough is usually harmful. The
oIll v vant It hal seenls insatiable is the want for distinction, the desire
to be in sonii way sulpe-rior to ones neighbors. Even the want for dis-
tiii(tion n(e(t inot cause l)roblemns except when the main avenue of
Iiti itt if)I iii society is to have a larger income than the next fellow
81(1 to ('oiisune move. The only way for everyone to earn more is to

a'hso'v i t I I le w o lil' w l it 0 11J wl .ii l' I'tl 1 i- l,1< -lll i," to i' ri'

T ( ., iIli ( it i cV& ci Ii t' I, t t jIl 14 Iw' ) II I -

)or 114 il V I *I I wbt:i-~ I Iu I x e I I i it vrc& It1m~ cucii~ If.1 t I 1
1) .

111 l.ll. oluenu t oe ty pi'iiiS* -,I car Id ii(1'dl ti ii .Ile cV xVIVli
del f- aI I I IIl I I ,v1 1j 11 e Iet Il it) I'e l i 1 hI I II t ii I~ I' t aII I te 'I VI ( I I
f'i') tll e st 1 ls v('.ItI i)* Suchk Thel ed i~t) .1 t'lom l ilal i\ t'1V1 I I I I I I tli
i I o wII V.i and ll that jslll5 h I k1, I 'C '-i rl i vo I l I) t' I Iid
be eelt I I li e si l Iha it i liv'll Wlliii zWl' it Vh, s I'tw ll I a l3, e-
Io a l \i i Ire wii\ V I Istr at ..I.I Ie I I Iy I-( i i it I I r( a I '-a lit I I a.I I I I i
fii e .i 5 jt oit( rdul cionAll ill ]li< ('\\11 ilwi ile P t ) lti ,;llliel i t 11s iY1i 11
'I d u lc t i l [ ill t h e i!lc o ll l ic ( I'' S t o ; I -, .5 )( l ' i p e r c e n tl~ t i ll )l l i s -1.' l

\(l'v e l ,' if t i l) i)55i il' la ) tr lzl '(r",l'i;iii) l''il( ''~ l x :
o11w ll ,( i 1 iI I i o l ( le I )l-ti e 15, -,1-I i ht Ir) s ofi ,I I e' ii V :ur .
tll tpe itl- t l i e fit bIfhe illtti d(V IlIll 01 (Ie iil i t I, ;li'iilc -o iihV l
itIv, o.re i y. :e ()i)ll til li ov It i 110 lvert w I it Il e t iacoi l r I vr"
mf r Isolh al ll ( t w to e. o I le
'tev inc loltill t -' am1a c .itHCVisr .T w nI

of e le I i iI { c i et to III it h ]i l it 1iil i l, t ti (,(l*il i .1 ) IfI(11

rtoiviie. is a]ro\V ti () it.1 1: i s Iwe 1 lw, thaty i oiat1zIial bIe I vs vI ul I il
N it tro ll Ishe rice ftl coll t 11111v to z"'ONN I,, I ltt Iv Iw Ila'f~ I I d 1w

IlidiP'ziidl 'osts isl t ih(l it solita l>t)i iit i er ow ill !or li, e lpioil. would
(1 not satie v 01ou1 eiits iti 'H v l'-d o4 1 ()1'er, I)llt sti re iPAw- I \ 1
st isfy Ol1l 111081 1)ressin needs firstI k~lewvise w',e (I,) l(it It Ute ()1i1' h x\\
Of itrIlV 11/(11' tus Ili allY O lle, lut exploit i ltie wi i r lt i t .i1r ': ea i i>
(C1 eSSil)ie r'esomlreeOs first. rliis eeieil t ha ii' llle .f le si mll e of xit)i
unider'lies |hot i thie law of' diniiiisliii" liilir7iiiaI b)eniefi aidl! 1 lie l:i ,\
increiasilnv iil(Il t'osts whiili are tlie veri'\ sgrithieonles ofI r(I ii u t'.
liOllo (' 011t i 1v lii o'to iggregte ll ia s nve itori ll', oi tl r
the o sut il t Iion 1i' t. l beo t tit(lie rtit- o of ,a l es'voiit l l :1i 1 oit indi

ivOVti inh C!Ot'l{ will 'ost Iiioi' liill if is w irthi, iit wb's 110!- :1flolw llf i14
ileuititIv tgre Xd fa)ill a wlithe i i o e n rt iliti'r i he ]l"'iii\)i -
Sg oiwi ethsh oo u'ldri t li I l di:itl'2 i:! te to! L"I h\ ii 81lv'
v1'euit'' li.i ilie Ai" ii ii a nl it is, we' :il at .isI s t i t ill all. It i i'
\'ealilnlg ii h o.at rte ano at'iiiaiitl iat tirowtl Ii i'i! ins wiit :11 :1iiiic equal l
(eiiinsl i iii i it tn d w li:lle 1)11Vt I lie 01)1ti liilil I t 1 i t I't rIi
i.i'ot svIl ]. ltoiot' lit dl v siliiil;ir 1 first.lli':i li wti te do llt eot linvi mil; In-
tlVtr nll. In O il t, exp li !, l w ia llt beil)t(I'l dlt'
of lilcit l 111(11 1lm le.ss h c ,1 h e v ~v t j so ,olm *(


ne '1. 1(wevr, appeal to co1onsense argjmlenTts dealing with
specific important (.su1s 1 such as energ. WhNAt Ire theost
and benefits of firt her energy growtlh in the I.S.? ie mar nal
enehits Iust he casuired l)Y the sat isfact ions that wouhl be sacrificed
if we had a lit less m('r.- i.e. the least important uses, which in
(111 P society iire quitee trivial indeed. ihe T-ic mmYina1 eosts must reflect
tle values sacrificed when more nuclear reactors. strip mines, and
Alaskan pipelines are bluilt-vev 1)asic, nontrivial values. How can
it be that veden and West Germany have ireI' average standards
of 1 viin and lower incidences of poverty than the V.S., knd yet
Colllen0 I'will ow-hal f as much enerv pe ( CU)ita" ? Surely th is mdi-
Ites t hat ext'a enrir1~"," ot VVel pro(uctive of extra wellbeing, even
if it were freely given. Of course it is not free. In fact it is becoming
so expensive that large segments of the population are making known
their unwillingness to pay the costs. either inl dollars or in environ-
nental teris. Economists nay not )e able to measure the costs, but
the pul)lic can feel them. Of course we need a new long run source of
energy (solar) to replace diminishing fossil fuels,. but we do not need
further growth in pcir capita energy consumption. The marinal costs
outweigh the marginal benefits. Growth proponents should be asked
to explain why they believe the contrary.

How can we achieve an SSE without enormous disruption? The
liffcult part is inmistering the moral resources and political will to do
it. The technical problems are small by comparison. People often over-
estiniate the technical problems because they inistakenly identify a
SSE with a failed growth economy. A situation of non-grrowth can
come about in two ways: As the success of steady-state policies or as
the failure of growth policies. Non-growth resulting from the failure
of a growth economy to grow is chaotic beyond repair. But the fact
that airplanes fall from the air if they try to stand still does not mean
that a helicopter cannot stand still.
In an effort to stimulate discussion on policies for attaining an SSE,
I have suggested three institutions which seem to me to provide the
necessary social control with a minimum sacrifice of individual free-
dom. They build on the existing bases of private property and the
pice system, and are thus fundamentally conservative, though they
will appear radical to some. The kinds of institutions needed follow
straight from the defintion of an SSE: "constant stocks of people and
)1 ifacts maintained at chosen levels, that are sufficient for a good life
an sstainable for a long future. by the lowest feasible rate of
throughput." We need : (a) An institution for stabilizing population
(transferrable birth licenses) (b) an institution for stabilizing the
stock of physical artifacts, and keeping throughput below ecological
limits (depletion quotas auctioned by the government) ; and (c) a
(Jt ri!lft inst institution limiting the degree of inequality in the distii-
limtion of constant stocks among the constant population (maximum
and nininumn liniits to personal income, and a maximum limit to
)ersonal wealth).
In (liscussincg each separately it will be convenient to begin with the
last niientioned of the three.


Ax. ThoI;t,: t~tL / bo ib~loll J. f/0 1to Ib' 7
The classieai jist ili(caioi for l rivate )li V i that it :etvr a
a bastion ag:int exN l)iIa ion, l; t (li is I1 lie ,, ( I. i .
holds sone miiiilluill piopertv and li) oel I:l's n(o) ilul. I I" h1,
people own all (l pe olpeL'IV, (11)0',11,1V o'I the l. ."i- of l)ict :I,
and o! her people owil nothing ,]bt t heir omw i bodieI. h, IIn I ( iI- i Mii-
tion of )rivate l)rOI)i'rty c Ile s I li( very ilist IIuIIle it ( i)l)ital io()
r'tler t han a bastion against it. Il'l1i 11111(1 at La we 11111-t v)) i'
to Karl Marx, anod we iiav (I0 so wit hoi( acCCpti) I I, Iailnr I eorv
of value or an, of lie re (l- of Io ie Marxist l)1. 'I ,. ',. T hi.s I)a ic p)oilt
Was well-stated by Jolhn SItuart M ill :
I ri vate )rO)erty, i 1 every defnce( maitd(e ,f i f, i-, .<1I)I) j (i I en 1 t it, L t'8 1: I-
tee to individuals of the fruits of their own l:bor ;).d :lI.-tiie', e. T ,, 1 , ')r: ',,
to 1h(l.1 of tie f'uiits of the ,la )r and abJst)iille'!'' of w)I i io.i> I ;1n) 1ii 1 it) |tli
without any meit or exertion if their own, is i10t of the of':St'I,( (Ow li ll-
tionI, but a i ed incidental f-I' ,([jlie ,e, which, \\hel it ', (hi- (.1 aiii hliit- I
(i()e. not promote, lutl ('oi!:!iAs with, ilie ends which rollwir Ivri V4 0. d'i"
,;gitimate. ("Priniiples of Political 'Bo( () ')y," 8uok I, 'CijA1 r I, ")
John Locke an(d Thm) ais ,eer.on liell sinuilar viiwv on lv,;u v -
u1n)11elv that it is leij 'mateonix' ,.iliii a liIitl nniue 1,1 iia'itv.
It is easy to show that too much iiietjuality isitl.,oll!v )IV bcal, i. ani,!
that too 1u( c eqlualitv is iltolr)l v Iifli)n,.. Plato >aido li, r
citizen should be four tiiiies las W0al11v as I,, )r('A. I wo('iI ;r1":::,
that in todayls econon i s vst ,mil all real di ei ie ill ei,'ort' ai i I ,i
(Colld be Col) Ipesat'd within tle ranve of a factOr of ten. A ujl1P1ii111u
ill~t'lIe of $7.000 andI a iiaxiniii inICome0 Of ," )17) ,0r 'ar v, ic
>,1fik, e to) serve all I egitinitate demands of life enic ial icwa ,l.-m. 'i
"a age',V of salaries in the V .S. (Civil Secrvic' 5 c1irrelit Iv 1)1it thn
order of magnititide, a l seeiis adC llate in pl'ael tice. I" 1.1e lv:l a.
(I i ,i rees with tle;e particular limit s, het li .' >iz "e.t l> o1wn ii, V',.
'I'lle iliport alit polint is the ) i' ipe of" liii iid i nequaIiiv. umi
1 -n,, e 1 im1i ts.
To achieve tl. lhriii e o limited( il(willit WO 1 dia lhitlltli
in>I~ ~ ~~~" 1it1 uto.I 1 g- avr Im ply one: a ii niiiinuiin.t 1hlCO)Ij1 J101, aIl(
11 1! PC cel OI )ersoia l i)CoMe atii xvea lI. tli a well a-: xi-
I1i1h:1 liliit. onI corporate In afI(liii11 we1 )11)lll r.qul-re th' h t all
('0):'T>()a(to lo'e i s lw pl~a ({ (,)ii(, (( sttw i'llvi)! en's. '!,w 111*11111,1 i)) !;1- 1
al'rea(Iv has ha-; (ppomt fI'n)II jil,';kiIs and (n5(- wealth lim1it Would m1w0 ) V8>I)I 'lci(x 0)110 ('olhIl ahl\\'\- t1)illwoH
wealth and hardly ex ect, t li1a, e it 1-t'eStil vear tier ve.'. ( '.11% j 1i' ri-
11 11111i its on1 1)1)1 hIVCCi' ('O INA iid xia liii l1Iaxe"IM! I 1 :1 1i(i 4 I
irsi miiitoit ole ]loiifiit 'mn-AerjIII.II ll ii a ,>-1t': tPT Pe \t i
j)initt 18 P'Oi 14)11 dl iEailJhi ailti( ilhu ilii )(' lselu{ V clu') ] a H I (,i:
Mo~reov'er, thle Il hhe thoelii~ih~l :1 11inonv I !e w 'i i' j-i I
1111111I~g :11;tilizt. ExAact, Iv Nv tv ,1 I4~ t Il 1imits a ve >-ki lIio l tI-()IIt :
M (i) ()) o( size. (()ta] Iwl) it ol ) lzc, a )ld ()It ti ( l i< 'i l i ,) W i M I Io)
(t : 1t'l- -eail's AN1 il l~) the, Ili lts. I!the, last, lit I ill-it, mtI ):i I ,w tl:\
a1l rlhisf(r' I)()licies ()f the ')\le'ilil'elit.
hew l' i'li:'1')l toi l't'l lh' i \ Ii\ '
lll~ ~i(s.If I'. t Is 1:,,\v )r l i,l:v kv,,p f); vi t i f I i ,. '

's 7t i i; I ,


ini inore thtan the maximuni, 1ht paying the govern ent a 100 percent
mir~inal lax rate. That would be a special form of pulblic service.
Monetary incentives are clearly clit to Zero for those who have reached
the limnif. Bit the opportunities forgone by those at the limit are still
available to be exi)oited bv tlose who have not yet reached the limit,
and the O)poiililit lWS and incentives of the latter are increased. In any
event it i (1oubtfil that monet:ir considerations are very strong at the
m'r'jn for tlmse with incomes of around 000.Also it Should
renlelll)ered that in the E we are not StiilViV, to grOw, So the whole
qlest ion of incentives, though still rlevant, is less pressing. If the
1N lid anl miniii1huin w(re so close together that incentives were
inll' jint to call fortil the liecessalry effort and talent, theln we should
have to widei the limUits ort 1 Silly be content with the lower
level of wealth tLat could be maintained with the narrower incentive
Within such boundaries limiting inequality the market can be given
a much freer hand than currently. Price controls, wage controls, rent
controls, and all other interferences in the price system are nearly
always aimed at limiting inequality. Since limits to inequality would
have already been achieved, there would no longer be any need to
nieddle with thel price system, a practice which is in any case usually
worse than ineffective.
With limited inequality prices become truer reflections of real social
S'crifices at the inarifl. While the rich would still have more dollar
votes than the poor. the differences would not be so great as to defy
justification. 'With linlited inequality saving will represent abstinence
from consumption rather than surplus left over after satiation of
consumption by the wealthy. This plus the distribution of all corpo-
rate profits to stockholders will lead to more careful scrutiny in the
financing of new projects, and will have the effect of slowing heedless
investment and growth. There would also be less expansionary pressure
resulting from great concentrations of financial capital (i.e., debt)
seeking ever new ways to grow exponentially.
Since the other two institutions to be discussed below rely on the
market and private property, and in fact extend their domain to
cover newly created rights (depletion and reproduction rights) which
must henceforth be recognized as scarce, it is important from the
outset to insist that the major defect of our economic system, excessive
concent-ration of wealth and monopoly power, be corrected. Otherwise,
the proposals that follow would simply further increase the "tilt" of
the world in favor of the rich. Even though the institutions would still
work to achieve stability, it would be a stability purchased at a higher
than necessary social cost.
B. Trfri sferable BIrth L be"ntcs
This idea was first put forward by Kenneth Boulding (1964).
Iardly anyone has taken it seriously, as Boulding knew would be the
case. Nevertheless it remains the best plan yet offered, if the goal is to
attain aggregate stability with a minimum sacrifice of individual
Ireelout and variab i lity. It combines micro stability with micro var-
ability. Since 1.964 we have experienced a great increase in public
awareness of the population exl)losion, an energy crisis, ad are now

ex)erienling tle fai I nrev' of tie re:It '"teIl Iic:il Iixt (cre'i,-t ()Ii l-
tionl, Nuclear ]Po~v 'r, a(111 Sp,a(() 'llI_ l l( i (:~ ,i t ,''
del iogra)le'r to take tihe pltit ,,i4'1()lyI aIl ll )1 WIll )lB)lWa[IV ,,11,)w
(I lecr, 191)7,5).
The )Iall is sillIply to iss, eq(ually to I P' 'li's1 v
Only to every ivollI) -sintce the I' iale is the IilllIt' Ite Iti i'(r Ji! I(-
l)r)(luct ioll, anil Since l118t('i'liitV iS l ,rl(' Il()Olht r:-l 11) ()l pa i llivy)
all anollIlt of re'p)o)liIct i(ll lict'1IMS's t Ili ).t I,( ,- )1(I: to i' Al: vi t
f e rl t i li t y 1'l 1 1u l s ea c h l \ V ( llialll w ( )ill rv (( ( i v e "_L '2 Ili ,'( i i I w I , ) <
would be divisil)le ill uis (ii o(ite-t'iit i, wliil 'Mll(lij. l+!It'l', uIJ
called the "dleci-chlill.'" lPo,.--(,Sssi()) (,i+ telt l de l-ch, l -itt ~
legal righlt to o,110 l)l'tll. Tll( li,t, aIe fle''IV lai' ,rral~li' Lv Ir u,
gift, so those who want IioI' 014111 two (iI(Ire'h, a(Il call a flo()ll 0i1V
th extra liCenses, or cait :tc(q liI-e tilell 1)y gilt, are I'e 0 t (b) ,. TI i'
original distribution of the licenses is o i the basli s of strict e(jtlality.
But exchange is perlnit ted, leading to a real locatioll ill col iforiu1tv
with dillering preferences and abilities ato WY. 11's listrihi ,tive
equity is achieved in the oririnial (list ribution, and alloc(ative eilii'lIy
is achieved in the market redistribut 1ol1.
A slight alnel(lIAltt to the plan illighlt )e to grant 1.D) certli,.a(t- to
each individual and have these refer not to births but to "survivals."
If someone dies before ho has a child the lls certificate leo (hts a
part of his estate and is willed to someone ('se, e.g., liis pa'litii. \l\ 1o
either use it to have another cild, 0), sell i to soiuie els. Fe I i-
vantage, of tlis modification is that it offsets existing cllt s di fleli''1t ials
ill infant and child mortality. Without the modificat io. a Po011 fin1,iIy
desiring t wo children could enid up with two inlfalt deaths and no ,,er-
tificates. The best plan of course is to elinlinate class diL'rvui,: s in
mortality, but in the meantime this llodilicat ioi lmay uIlake thii,, lpla
initially easier to accept. Indeed, even ill tihe absence of cla -s tifervii+'el-
tials the imtodification has the advantage of buillini in a "triua1 ,l .
Let its (lispose of two cOliilllOll objections to the plan. First it is
argued that it is 11just because the rich lave an ad v(a lI talo. (I m) i Me
the rich always have an advantage, but. is tleir altvntaare ir -
or decreased by this plan ? (learly it is decreased. 'lie efi'ect ol' t he
plani on income dist ribution is equIllizing because(1 ) tle new wa Ket-
able asset is distril)uted(1 equally, (2) as the ric lhave ii oF, (liil'
their family per (apita cones a re lowered, as the l)m' hIave tfexVer
cliilhdIeL their fan iily per capita illcOlileS incr ease. A 1 o 1,01-ll it l"ilit
of view of the chiilltedi tliere is sotlithih1~ to be sail 'o ithri'>L ie
plo.al!,lity tIIat tiey will be borni richer rat tlal ,I ()(,r. AV, t,,t'vt, r
InjuiLtice tllere is ill tile ilan steis froii tlie existence (4t rich ll)il l)()jr,
not fr ii Boulding's ) Call wIich actlially redit'-, tlt' (le(rie ()I Il-
jilstice. l1'uirthierninuo)e ih('(O)lue andl wealti distri iit 11V a i(), h ()I
to)lle(l lv a sIarate l itlit loll, (liscll>M'-E, l alhm 9',>0) lat in Ili, ,, ,L ll
systeln thlis ohlect ioul is Il)lre filly ant di rectiv Inet.
A more rtcvo)ialilt'l objc it'in raist-, t pl.'ohlu!l ()f e l
Whlat, t Io with la~w-hre:ukius" l)11l(,)1ts 1id thl e.ir ille-gal c.hiill i 1
What do we do wit Il illegal I'liilhl'eiu tolay ()Il' pl-ilhilitY iV ,) ljlt
the childr(en up lo) a(l()ltio and (i'zwoir-aYe :(loioi hv l):vjitl" l
atld in g lpare ts tle ilarket value. plws slrihlv i Ie' hle" w. i'()" tr
li cl-, ', t l uus :ri lg 1 jo'tll-t' fr(li ril'clil: iml to cmlipensate to!' I Ile,
('11i1l 1 )ii it Ioit :a Ili'(!V '. I ike :1u1Y (otlie l: w lv'ealk r', Ilie ,: ,",l


ig parents are subject to punishment. The punishment need not be
d tra-t ic-e.z., "I years lahlor Iii a public child care center remunerated
:Lt thle ini 1*fh111 income. Of course if everyone breaks a law no law
.:1I1)e enforced. 1W The plan 1)Iposes the acceptance by a large ma-
ioritV of thie public of the morality aN1d necessity of the law. It also
)1,'(,S l1)j)Soss Wi(lespvead knowledge of contraceptive practices, and
1 erl I s legalized abortion as well. But these pisuppositions would
aitpl: to any institution of population control, except the most
Choice may be influencedt in two ways: by acting on or "rigrng"
the objective conditions of choice (prices and incomes in a broad
sense), or by manipulating the subjective conditions of choice (pref-
0e1(ees). Bouldings plan imposes stra)ght-foi-waid objective con-
straints and does not presumptuously attempt to manipulate peoples'
preferences. Preference changes due to individual example and moral
conversion are in no way ruled out. If preferences should change so
that, on the average, the population desired replacement fertility, the
price of a certificate would approach zero and the objective constraint
would automatically vanish. The current decline in the birth rate has
perhaps already led to such a state. Perhaps this would be a good time
to institute the plan, so that it would already be in place and function-
iniz should preferences change toward more children in the future.
The moral basis of the plan is that everyone is treated equally, yet
there is no insistence upon conformity of preferences, the latter being
the g7eat drawback of "voluntary" plans which rely on official moral
suasion, Madison Avenue techniques, and even Skinnerian behavior
control. Some people, God bless them, will never be persuaded, and
their individual nonconformity wrecks the moral basis (equal treat-
ment ) of "voluntary" programs.
Should it become necessary to have negative population growth (as
I believe it will) the marketable license plan has a great advantage
over those plans that put the limit on a flat child per family basis. This
1itter limit could only be changed by an integral number, and to go
from two children to one child per family in order to reduce popula-
tion is quite a drastic change. With marketable licenses, issued in
"deci-child" units or one-tenth of a certificate, it would be possible
,ra dually to reduce population growth by lowering the issue to 1.9
certificates per woman, to 1.8, etc., the remaining 0.1 to 0.2 certificates
Iemin acquired by trade. Alternatively the government could purchase
certificates in the open market and retire them.
There is an understandable reluctance to couple money and re-
producRtion-somehow it seems to profane li fe. Yet life is physically
Coupled to increasingly scarce resources, and resources are coupled
to money. If population growth and economic growth continue, then
('01 i'r1 e resources. such as breatbal)le air, will either become coupled to
ICI "1 nnd subject to price, or allocated by a, harsher and less efiicient
,- Once we accept the fact that the price. system is the most effi-
cient mechanism for rationing the right to scarce life-sustaining and
I i fe-enhancing resources, then perhaps rather than "money profaning
life" we will find that "life sanctifies money." We will then take
the diStri)ltion of money and its wise use as serious matters.


C. The istributist Istdatuton
Tile key institution woll I)(, the (dple(cti) 11(ohta atmct ion 1y wI ill
the annual aIniounIIt extracted of eacl basir 'eaolIrPe( \ON 1(1 1 &
and the quota rights auctioied by the govCrniinielt ill (,OIIl ,i! 1l
divisible units. The resource ..nwrket won ld become two ti-'ld. Lil i,
the govelrzin'llnt, a's Iaoiuplist, t1ould atn io t liIuitel iiT 1
rights to many resource buyers, who, biavi leliset. te i,, J!a
f1~.1ie ls, IoiiI1 ('liter t le d'vItI t c' (t II e lie Iwi rI ,1 X\ Il, I X' ii I4I-
front.1 Il-aliv reAl- eS eht> ii8((ciI)' 1 i iiiarke1II\(I>V w
pay the resource producers the market p'ice and siir( erl,., ie w' ~ i-
site quota rights to the pro lucer at. tih tin ic of itir i. T le firli-
in the extractive in(hlstry would be audited to iiake sre I 1t jro-
duction plus change in inventories balanced with i(ota critota :rt


0 q

Let us review what is aeliived lby the (e fle eion ml otI altitO. i vmf,
the thromgyliputi of a):"ir reoure, es is p"0vi0 li3v limited, a;Ir vwti it
the raie of dleI)let IoU ail pollution assorItIted withII t IIat llre. A I,-
caI ion of tHI lix(ed 1' S1OI a' r'1te: ai lonX eOIIthtt In 11114 k IS 1in l iiS

lilt) is the iuiarket 41el1I/ai4I Ciii \ 0 Io 1?if, rt'olr4) 1 I q iesfti4I'i :iii I >'S' is TI i: :
vertical li'ie Q41. Ti e tot;,! ip. eo lp, i41 i r iiiul of il0 r'u u t lot'i oil TI It I I I
Prfldl!wo' D]I hi l!un t 'prt The hl o t I i 1iS t !v t~l 0 f1 A!' Tri\ llI 4' 44 |< {1 4 [ I f 4:
lirh' (ilt tlle :im i O t it lie', p t! 'o lin o r'nt Irct Oe tro. li 'r t 1',I. b l Ti t
IN ('4 .1. roult e n I1u''''Ni!', 'ifll Vy !~ '' lbe\trt'l4li l e' t i. '1 t r~o ll4I',l r t "I' '
Or1 rut 17O 'n4 I!ti | 41'ft'iI'41 : e'ui u I'ii tlt i, o;' o o" V! !! 3 lrlh (. l i ll' lo! I fl llIt .
ai lltl Tl'S I' 114r u ii rtfl nil t H I' l Tll 1i0llo to 0 l tl'o i u I~i V 114 r rl f V
Illl iel(r." 11w flYli44Ulflt (' X 1KB. i' }I iluro' 'I?''4rc'i routl un'! 'i0,,-'l~ 11 t o 1 l''' ...I
f~lutopOlii' ill tie '-'ni'o 4f T{/,~ 'tI -~t' 1114 i.'' :T]'' i t V '!!+ t, 'r,'t aI~ i~t C!
O1r pulre soaritty rent thiat re shlllN I1on1 lower ti uuntlttv uiid hI fhor tprti


i- (d ,ie I v the market. The price of the resource increase ; including
greater efficincy of use, both ill production and in consumption. Re-
source-saving technical improvement is induced, and so is recycling.
The monopoly profits resulting from the higher prices are captured
by the government, while resource producers earn normal competitive
profit:. The governmllflent revenues could be used to finance the mini-
nuwi income part of the distributist institution. Efficiencv is served
by high resource prices, equity is served by redistributing the proceeds
of the higher prices to the poor, and by ai maximum limit on incomes
of the rich.
What criteria are there for setting the "proper" aggregate quota
amounts for each resource? For renewable resources there is the fairly
objective criterion of maximum sustainable yield. For non-renewables
there is. of course, no sustainable yield. But economist John Ise (1925)
sulge'te(l fifty veaars ago that non-renewable should be price equal
to or more than their nearest renewable substitute. Thus virgin timber
should be priced at least as much per board foot as replanted timber;
petroleum should be priced at its Btu equivalent in terms of sugar
or wood alcohol, assuming that is in fact the closest renewable substi-
tute. For non-renewables with no reasonably close renewable sub-
stitute. the matter is simply a question of how fast should we use
it up-i.e.. an ethical weighing of present versus future wants. One
further criterion might be added: even if a resource is in no danger
of depletion, its use may produce considerable pollution (e.g., coal),
and depletion quotas may be imposed with the objective of limiting
pollution, the other end of the throughput pipeline.
The combination of these three institutions presents a nice recon-
ciliation of equity and efficiency, and provides the ecologically neces-
sary macro control with the least sacrifice of micro freedom and varia-
bilitv. The market is relied upon to allocate resources and distribute
income.,s within imposed ecological and ethical boundaries. The market
is not allowed to set its own boundaries, but is free within the bound-
aries imposed. Setting the boundaries externally is necessary. It is
abs-;rd to expect that market equilibria will automatically coincide
with ecological or demographic equilibria. or with a reasonably just
distribution of wealth and income. The very notions of "equilibrium"
in economics and ecology are antithetical. In macroeconomics "equi-
libriUil" refers not to physical magnitudes at all, but to a balance of
desires between savers and investers-equilibrium means full employ-
ment at a stable price level. This implies, under current institutions, a
positive flow of new investment to offset positive savings. Net invest-
ment, implies increasing stocks and a growing throughput-i.e.. a bio-
physical (d;sequilibrium. Physical boundaries guaranteeing reasonable
ecological equilibrium must be imposed on the market in quantitative
How do these proposals differ from the orthodox economists' pre-
scription of "internalizing externalities via pollution taxes"? Pollution
taxes are price controls on the output end of the throughput, while
depletion quotas are quantitative controls on the input end. Depletion
is spatially far more concentrated than pollution, and consequently
much easier to monitor. Quantity should be the control variable rather
tlan price becausee prices cannot limit aggregate throughput. Higher
relative prices on resources would induce substitution and bring the

relsoirc IOContent lper 117lit cannot limit th li 1Iuulber of iiiiits 5of ()IlIt I)11I It pO( liiced'ill :1(1t I It'i' I() e (i-,II
hot linlit tle tot a] volllle of r(- olree i lIll~rillt. A rtr. Ziiate .1iUO1hii is
alVUv,; SuJil thejet to pl B ias e t~le 2r1" WNll"L ar-e2:I I ( slipl yv 1 '1I-
of prices. III the faiiiiois Nvord(s of -S:ivs Law. 'I 11pl\v ci't-" t\% ow
deliad". Taxes, )by raisiPir relative lprixe-. coitb! pImr \idI a wi--lot
lars NVO1't 1i of output down to Solmie Iea&il)I, iiii hmi t t l{e I111111}}ii"
of units of output could(I ee i) I th lovev{l{leJt 1':1I :Il
eCV, -._row'ivn bIii. et slrlu s. Finally ( it v it lItt aI ,fects t tie
biosi )l'er. not price. It is safer to set {(1(}logic'Hl i1I i t ill e Iin of fixe(I
quantities, and let eorros and unexpeedl ( '(1 ,I(HII work t el i ,slves oit
in p riee ct1ianges t hai to Set prices and let errors and o0issio11s ci
quantity clhanges.
The "internalization of externalities" is a good strategy for fine
tuning the allocation of resources by making relative prices better
measures of relative marginal costs. But it does not enable the market
to set its own absolute physical bounds. To give an analogy roper
allocation arrancres the weight in a boat optimally, so as to maximize
the load that can be carried. But there is still an absolute limit to
how much weight a boat can carry, even if optimally arrangZe{1. The
price system can spread the weight evenly, but unless supplemented
by an external absolute limit it will just keep on spreadin I tle in-
creasing weight evenly until the evenly loaded boat sinks. No doubt
the boat would sink evenly, ceteris paribus, but that is little comfort.
Two distinct questions must be asked about these proposed institu-
tions for achieving a SSE. First, would they work if people accepted
the need for a SSE and, say, voted these institutions into effect?
Second. would peol)Ie ever accept the goal of a SSE? It has been
argrued above that the answer to the first question is "-es". Although
the answer to the second question would surely be "no" if a vote were
held today, that is because the growth l)aradimm is still dominant.
With time the concepts and arguments sketched out in sections I and
I will look more and appealing. and will themselves be sharpened,
as the real facts of life push the growth paradigm into ever grreater
anomolies, contradictions, and practical failures.

V. So3IE FUR-'rirn QUESTION>S \NI AND Wi1 (' (j:nxlt;; Ax SSE
(1) Is it true that to prore fhlat te yron-nh rate ic ,Yccscc.,u l / i
necessary to s]iow that the resource m/Nal/ocat/an at any point
of time takes the form. of rxcer;'c ;nveslivmc) t ?
This question reflects a common lV held position anionc economists
that the market will automatically limit growtli at some optimal
rate. But we must first ask just, what misallocationn" or more spe-
cificallv "excess investment", means in the context of the question. It
means that more is 1eini invested and less consumed out of current
production than would be the case under free] comletitive markets
and consumer sovereignty. Misallocation is defined with respect to
the competitive market e1iililwrium of the plans of savers with tle
plans of inves4ers, not with respect to} )l1ysica1 rel at i ns of the
economy with the ecosystems. Excessive "disinvestment" of ceolorical
capital (depletion). excessive poll ution and dest ruct ion of ecosys-

tens, and excesively onerous teclologies, are all consistent with the
condition that savers in the aggregate are planning save just what
investors in the agrregate are planning to invest. The market seeks
its behavioral equilibrium without regard for any ecological limits
tlat are necessary to preserve bio physical equilibrium. There is no
reason to expect tlat a short-run behavioral equilibrium will coincide
with a long-run (or even a short-run) biophysical equilibrium. In
fact it is clear that under present institutions the two will not coin-
cide. The behavioral equilibrium between planned saving and
planned investment nearly always requires positive levels of net sav-
hug and investment. Positive net investment means growth, which
Inans an increasing throughput and increasing biophysical
Oithodox growth economists are likely to reply that if only we
could internalize all true ecological costs into money prices, then
market equalibrium would coincide with ecological equilibrium. This
is a bit like Archimedes saying that if only he had a fulcrum and a
long enough lever lie could move the world. But even granting the
imifl)~Ssi}lc task of internalization, all that means is that all relative
scarcities are properly evaluated. Growth could continue and absolute
scarcitv could become even greater, even though relative prices were
at all times perfect measures of relative scarcity. Correct relative
prices can help us bear the burden of absolute scarcity in the least
uncomfortable way, but cannot stop the weight of the burden itself
from increasing.
Excessive growth is sometimes thought of by economists as a mis-
allocation over time-the present is sacrificing too much current con-
sumption to capital accumulation for the future. Conservationists
looking at the same rapid growth attribute it to too little concern
for the future, evidenced by rapid depletion of resources. Who is
right? It depends on which is the limitative factor, capital stocks or
resource flows. If resources are superabundant and capital scarce the
economist is right. If resources are scarce, then the conservationist is
right. The future inherits not only a positive bequest of more capital,
but also a negative bequest of depleted mines and polluted sinks. The
inter-generational costs of growth are not at all clear, but as time goes
on it would seem that the negative bequest would weigh more heavily.
The market is not able to allocate goods temporally over more than
one generation. Future people cannot bid in present markets. Current
markets cannot reflect the needs of future people. except ,s they are
represented by concerned people in the present, whose concern rarely
e( C(Pi one or two generations. As Geor. eseu-Roegen points out
markets are temporally parochial and consequently pricess carmot re-
flect the long run value of resources any more than fhe market prices
at an art auction held in Wink, Tex,9s would really determine the true
value of the Moena Lisa. If prices are to measure values all interested
parties mist he allowed to bid. For the future this is impossible. This
is no o)iective market criterion for determ inns proper inter-genera-
tienal allocation, nor consequently for sneaking of misallocation.
Also, within the present many natural values cannot be priced in
markiets at all. Consider the instructive case in which a juke box in
a student cafeteria, disturbed some students who preferred silence.


l petitioned for Ilie removal f lie ofr('IIin lij,'li I '. "Ie TI-
lover s' replied that j Ithe I lab x w s '(I I I F:1)(.1-at ( l_. liile. like a fi' 'V
11arl1t, and if thIe (isgru it ld 1d(1 Int like wIat mt, Iv I-, II I i v !,l
N(ot e wit thi*r n ickels to hear I 11,> IItl i I i 1 l'-U. 1 l e u'I lj,,t iOU. l r.,ll
wa.- that the silejLee-lover- jI!thel.S colld hot buy L' :, 'I''r hx
l*1iQMJII.tiOni Nas to inciiclie a (11-ut slnt~ic 1ihJ IleI ria-
1,ut this Solution is 1o1able for its 1iu (IlehI s.,lI( ii ]t 1( V >1, lei,
olea n air and wiateri, et. (c.,(imi )t he i rcl'eia d ill (Ii individuals, and tleir values cannot 1)e (efe1ided au,,,,it tleir' o1 )o-
sites in coilpet itive markets. T ev jiust l)e pD)k't(,d 1inv plive:t (1:1
houn~1at'ies iat restrict 111e (lomain of the niarket. Iht -it iomtt rrip-
plinr tie fuluuetionin 01 tfle 1iVI rket within ill ittA (t litl. Tl :Ki
is the inode of operation of the I iiee institttionS 1)tropoed ii seill
tion IV.
The direct answer to the quest ion flien is: No it is miot nee rv to
show that excessive investnxstt exists in order to ai-r (,i t},ia, the
Growth rate is exzeszive. There are othli titer :ore t1I( i, i
t!i,-e of a competli ive ehaviori I equilil riiin for de litii "exe,.-
Sive ylrowt]l.*!' bl"'"pe
&IYC 2TOtli.'Ie: aire bi01)hv''-2el ,'it&ri'i I :it ("iiJ1()t >, Ai:er'-
na] zed in market prices. Miaiket ( e7:1lilriH m oft en impi is bin1h1vl-
cal adicequilibrium. Nor can the market l adle int or-eneni it ohi alt) -
cat ion. All juterdependencies over time and p:ace haot le fit to ilie
Piro ru:stean bed of an unrestricted price system.
(2) (::Co MO t(T *-,, tiw us 172 1zkc il f1)) ? ~1
grot1h1 ?

The sooner we begin to slow down the longer raking dist ane we
have and the more gradually we will le able to make a(ijustil(s.
Finite Supplies are already forcing us to face a basic four-part qut'5-
tion : what size population do we want to maintain: at what stanlardA
of pir capita resource consumption: over what time period: and
usIF, what kinds of teChnolo/y Our current implicit answer seems
to be that we want a laissez-faire attitude of })opnlation, but ever
gr,,wlg levels of per capita consuiii)tiol liil tie lliollt C-t Yo(1-
t ralizrin enter v-mntensive tehnolo,,i es pcsible, for a Iforseeal ,1e fu-
tir '" of no more than 11 l eei1 Years.
Tue objective t 1"le-o(Ii lie CP ihjeetive. p' J1t'itit- I bit )i.oiiic 1
ro\ v'il our (,oni ,) bus I' '1p)01 eto I!:il'S fiur-i'i't (l'1roi 1i: 1, tl 1 2 2v
In l:.+<'< of clarifl, tion.

>ral)ilit < is n1iore iilpot't :irit t11:al or)tim l itv. In a l + ,11 Q

ladt iitveiItorv le1s h:ve l,, i ,.i0 l. 'V,: vt eld.,i le, 'rii:i:
+ I dliii nn ]evl / IS r1 a ii-*',e r wv, 21 iye to Ithy i(HIIr-J,:ii I1:" .... ,1:' 1r'1 4e~
1Il)tvf,. The O})t lil:Uii 1)01)1114l,, 1% ,)?,)le+i e (n+n t}ueop (+~i ,iii level tif per't
eal ia resoIn tlus. I iol of wich lOH!( on oor top! ;I I Itlo'uri It Il i
v 1at kind (f t( Ce ilo 'ie we I'dIt ier :il r'':'leilil al e :1 4*) t1
(levelop1 .
It Thould:lwnav; be kept in ind tha lmiiiuin~ !V, :il in
doe- 'Iot imply allyI limit o1 (1111 tliti ,levi 1-pmneIit 0o wNi (11o

7 715 ....7;


artifacts. Increased maintenance efficiency and increased service effi-
ciency are still goals.
At a national level one must also consider whether the chosen opti-
mal level is generalizable to a world of four billion people. Should
we require that the chosen national level be generalizable to the whole
These enormous ethical questions must be faced, and they are not
reducible to the one-dimensional notion of a well-defined c4optimum
level," much less to an "optimum rate of change". But we should seek
stability first, and worry about optimality later.
(4) Will it not be extremely difikut to 81w growth by policy meas-
ures that are mere reversals of previous "boost growth" effort
which did very little?
Yes. Even if the "boost growth" policies were highly effective, a
reversal of those policies would not be the way to stop growth. Merely
reversing growth policies will no more attain a SSE than flying an
airplane backwards will allow it to land. Landing is not the mechani-
cal and directional reverse of taking off. A steady-state economy is
not a growth economy thrown into reverse. Economies, like airplanes,
don't fly in reverse, or in neutral either.
We also must not confuse a SSE with a stagnant growth economy.
A condition of non-growth resulting from the failure of a growth
economy to grow is not the same as a condition of non-growth result-
ing from the success of steady-state policies. Naturally a failed growth
economy will be a mess-unemployment, inflation, environmental dis-
ruption, and other familiar ills. An economy designed for stability can
avoid these evils. The whole reason behind a SSE is the recognition
that growth cannot continue, so growth economies will be in a bad
way. We must redesign the economy for stability.
It is entirely beside the point to condemn a SSE by saying, "Look
how bad things were in such and such years when we had no growth."
The failure of a growth economy is not an argument against a steady-
state economy--quite the contrary!
(5) To what extent can the SSE, if attainable, be achieved only by
the use of very sofihi.ticated technical and scientific develop-
ments and understanding?
Continued economic growth is sustainable only by the use of very
complex and onerous technologies, and only for a limited time. The
best index of the strength of growthmania is our apparent willing-
ness to base our energy strategy on breeder reactors andthe plutonium
fuel cycle. Socially this is the worst alternative, but it is being adopted
because it is supposedly the one that can be most rapidly deployed
and therefore is thought to be the one most likely to avoid an inter-
ruption of growth.
Technology in the SSE will be directed by the depletion quota
system, and the resulting relative price changes, toward greater de-
pendence on solar energy and renewable resources. Traditional tech-
nologies (windmills, waterwheels, sailboats, etc.) run on solar energy,
so there would probably be a return to these "soft" technologies where
feasible. However there is an enormous field for development of new
and more sophisticated technologies based on solar energy and renew-
able resources. These technologies will be of lower energy intensity


and more decentralized die to tie (iitite a1(d dispersed iillure of sun-
light. The recent direction of high energy iiteinIsity and ccit lizAtiui
would be reverse in future technological de y1 -lo ( ut llt. 1r )e(entraliza-
tion is very desirable from the viewpoints of stability and democratic
But it must be emphasized that the SSE is not limited to traditional
technologies. There will be an enormous incentive to improve technical
efficiencies-not only the conventional First Law EttI iciency which
seeks to maximize the proportion of any given primary energy source
converted into useful forms, but also Second Law efliciency which
seeks to avoid using low entropy energy sources to accomplish tasks
that could be done with higher entropy sources. For example, don't
use high quality energy such as electricity to perform a low quality
function such as space leaft inUY. Enornimis possilui lit es for real d, veI,
as opposed to brute force technologies, exist in the SSE. Artful tech-
nological finesse has been driven out by cheap energy and materials.
The SSE would reverse the substitution. An example of artful tech-
nology is given by the electronics industry and the development of
computers that use less materials and energy and provide even better
service. This is what the SSE aims to promote, while opposing the
technological dinosaurism represented by nuclear power plants, super-
tankers, Concorde SSTs, etc.
(6) Do present and proposed po'ce8 contribute to the likelihood of
tl/e 'ow dtl'uptu.e transformation to a stecly-slafc ( (onom;!. 0'
(1o ther teru to oppose and make more disrupt 'c a -11ceis1Jy
tra ns f orm~at on *?
Present policies, such as "Project Independence," the proposed 100-
billion Energy Independence Agency Loan Fund, the irrational com-
mitment to the Plutonium Economy, our general low-price policy on
basic resources. are all based on a commitment to continued growth,
and consequently oppose the necessary transition to a SSE. It is obvi-
ous that a SSE represents a radical change in economic priorities. It
also requires some radical, but less than revolutionary, changes in eco-
nomic instittions. The proposals discussed in section IV may appear
"far out, but they are grounded in the basic economic institutions of
our country : private property and the price system. The reason these
proposals appear strange is that our current growth-impelled economy
has departed so far from its theoretical foundations. Hiuge corpora-
tions and bi labor unions are alien to traditional concepts of I)vate
property and competitive markets. Instead of tr, istl),s1ti we 11ave
relied o>l n!plieb regulations of pirivately-owneld mHOl10olits. Time amd
again private interests ca!>tlirv the regulatory auiitloitv. We sl il,
rely, as early Chiairo economist Henry Simons url,_,r(. on coinl rt'it ion
when possible.
Alien competition -I not feasible (natural monoIoly) then the in-
distrv should Le nationalized and run as a JI)l)li, (-'or}l)ortiOn. 'IV) I *.
avoided at all -O.stq. SiMnfIS C('Uitioned. iq the p'e11t al fxv,'a -la ,nv'o
of sluplPTOd p l wli re-rlll ion of pri vately -owned ionpoliez. Vlco-
polv power has been permitted in the name and Servi<'e Of zmto-1''.
Certainly monopoly power males the necessarv transfnroi tinn 0 ,n e
diflo(11!t. Not on1ly is il,' a Ine' econ oui r po)W'( "nt1 inIteI : tnt tl
the( trV:111< 11)11 to :In ])!ibtt Ole de(,!r(e of CI~~trt~OlhAtWVI

ill the energy sector today constitittes a clear and present danger for
l,('ratic capitalism.
~)o w//I oceau uf to a sowr grIowth economy affect employ-
e!l? flow would a 'ery slow or ?o-growth economy avoid
auotwt / (Jicat lPpresswn whl'l Wa8 att ributable to secular
stfagnation? Is there an alteraatue to layoffs duo-ing the
Under preset iistitutioi grI'owth is necessary to maintain full
eniployent. hlus many people make the false inference that a SSE
i)uplB s mass unemploymNent. A growth economy that cannot grow
will experience employment, ])ut there need be no unemployment
under teadv- tat i Ititutit tons. For one reason, wages could be much
more Uexible, sic a T16in111 inconie plan would substitute for the
U ncialoyn Ient-causing Minimum wage in providing a guaranteed sub-
-!StCe. Also the hiher prices of resources and energy resulting from
d'ePletion quotas will induce a substitution in favor of human labor
an1d away frmn luchuical substitutes. Also zero growth in popula-
tion woIild frieatlv ease unemployment, though only after a 15-20 year
la. In addition, the more equal distribution of wealth and income,
c-p eiall the maximum income limit, would greatly reduce the sav-
mran t in"rte demand, and consequently would
-1~z rate and~ itL: drain onl a=.r. at dmad
l'utdice unemlploymet.
A much more difficult question is how can employment he main-
rained in a growth economy that becomes ever more capital and energy
intensive in its technology,, while at the same time facing greater and
greater scarcity of the non-renewable materials upon which its tech-
noloy is based? ITow can simultaneous inflation and unemployment
in growth economy be explained by those who deny the reality of
re-ourfe and ecoloczical constraints? The employment issue cuts against
the Zrowth adlvocates. not the steady-state advocates.
Occasionally the employment argument for growth becomes truly
absurd, as in the case of the Concorde airplane. We are told that
40.000 British workers jobs depend on the success of Concorde. and
whoever opposes that technical white elephant must be a hard-hearted
elitist with no feeling for the working man. A moment's reflection will
show that if th0 lfillions squandered on Concorde were spent on mass
transit, education, or any useful project of lower capital intensity,
employment would be greater, not less. Also the workingman would
benefit from the services of his own product. With Concorde fares
wety, v percent 0)nv)e first class fares not many workingmen will be
ridin Concorde. They will be on the ground listening to the flatulent
4onio booms of their jet set betters, absorbing the extra ultraviolet
radiation resulting from ozone depletion and getting skin cancer while
they worry about low long their livelihoods can possibly derive from
ucl~~an absurd product.
O,)e further stratej y for avoiding une employment or temporary
];1v-()Is is to reduce hours worked by each worker rather than the
number of workers.
WVe could use our enforced leisure to learn to do some things for
ourselves and thus become a bit lees dependent on the big complex
system and our specialized niche in it.

) Ji

(S)Ilbt7~f (0f//) (~tIA oo 4/i '' 0~/u of /t /

The II thing thit hi, fur ,I ht>, : z I, )+Ia (,(1 ,, hJ 4, K I IC t ,
11 1) i n t o 0 t.') i l t S f; l l (,r t:1 1'up u 11 ,IV 111111111v n"e Oled to 1111 h :"tl' -:111 v, 1 i I I
pl \ n t, ,v--'I it M t ol.,: lit I zt I vl, I V J( I
I)lait wli7At o l. ion I w(vt(, i, le 11 1 1 "11
We ('1 1t, d not expeoli t <011t1ri Il (O1)-o it !t I I: ('t I 1 1

Voluntarily and nlam er +l\*v (ivide tliehvii ,lves 11l> o t :i ) tl.vtI i ,1 1 t

tl (wlS. 111it c()140121lr it)f :I"v oft''ilu to r) llLte I vtf)w v lr+ I++, + e+ l + 1r
iniea'iiime+ t]at l)I .v :Im,- t l, I 1l 011)i < I 1 i ,-
1e -s oil oMe Colllf)111, w' iutizi,. 1>1-ir:,,liv roilt1,Polt u1 '-i+4 iil I
to mIaIImilize i'OfiO, zi' B le t)}l)e in the hIs:. Oil'-( a i,":l
heifl& Q,'Ov,(le1 out of pi ji:irket )y other apiliv 2')r hi r
tions. W ith le s of :a >tr''irol for 1:11r .r +ha're of ihe ( nar',t. k'( 'I-
tions wonl( pei-ltnb) lbe (l riven and would have m!n,+e ft'e Ii o. I ()
act re-pnmsily. N til rovplra e ino>it 'eii':,ml to Ie, ;+;Ai

ts n / / 1 k d/
I -+ -itxv,) iiu S i l[. I T. en(! IV it + I)o'+i)l to 1:i., .'
I);1:-t'+j 011 !),'',':iV+ pir'>fle)v :'iil free ma r), et-+ v.}1( i, d.)) .(, ,,'' i)
e~t~(+ O) t-,] iiioK ii- ial du:iuiitl o ) 40 itr i' ,,Io >t11)i. -\vi 1 :Ile r;c
t ~vo t~I~~:i ~;uI \volllo he laeliuut 'I'er v~1 t' I:-
OX~~t12'Ij)olth :~i'- o 1 hlr ITT ;llli(l TV u it,%'r to ia -
(w li .111d -

1'1o ( 11)I) lt l:,~ .l \I,' i h'I () 1'i18xtB)lIInI I pe w ii fl, ole ;l+,+t:lhv ,V'i
tall}t. Ill th-M, it-,) prnatfe r ,'tv 4 fl it), ++.,+ ,'

I [; r 5>1 pi+' ei) it i 1 ,) h':T+ t l :1 t ':I ('n:E v, 0) l I ,,lV l>4 +'ic l ,+, +++.' T-
1111 t e I w'! n e r n ~ li 4 Zoo I iie i I~ I II' -I1110 o 1, ji w).
o v~n 0 lllit ici l+ (+, )+ ) <+l |. <,.)I w l ici (< +)':t be +( -zi ): +, :++
t w o + w o l l g% 'I'll( ]d 1)" 11o

/4 44 -I I ) ). ( ,
,'+,,,+,. ._ <) i +, '+~t~ tv.. ,o '. ,+_}11,, 0 )) W W I+,)+ ;;
liW, Pit w ,11 I }ol' e p i- od, uc+t(' t)'wi :,(, 1d 1)'v +', ,! }:( '.) !+
+ t x ~ i~. \v ) I+.-. a + l ). )', !+. '+r + +( '!+ -i,:l +I. W;,

o 7f e I, 11/
(m :I I I.-++ 1, -1111+r w *++ ~ l (m li w
wi._(~ NN-1I1 Itn '1\.I, heen('~ a f+,-( ) ,,+, u }+,,++ +- :}+
N I I e a' n v o'' ;ll I 'P I J + ,o,11I 1,+,)I 1-1.1 ,Il; c ,,l 1i% (A) ll++ 1+ Nd, + 1 w r ,
,<] i,}+ t I' i+ :, ,), +++ :, ),(1(, I vS I )+( ++,+ + -.,! ,) ,<+ '


hunting and gatheringr system could continue. No system can last for-
ever if tle entropy law is true, and I think we must certainly accept it
as true until an (xce)tioU to the law is observed. A SSE cannot last
forever, but a growing economy cannot either, nor can a declining
(onlider a candle. The flame is lit and grows to mature equilibrium
size. It then burns in a steady state until the candle burns down, finally
it flickers and dies. The flame burns in a steady state while the candle
lAss e recognrze that the candle had to be lit sometime in the past,
and that it must go out sometime in the future. Therefore if we draw
temporal boundaries around the process so as to include the beginning
and the end, we cannot call the process a steady state. But if we draw
temporal boundaries after lighting and before going out we can de-
scribe by far the greater part of the candle's life as a steady state
process. It is a question of definition. To describe a flame as a steady-
state process does not imply that the candle will last forever, any more
than a demographer's advocacy of a stationary population implies that
he believes the human species both existed forever in the past and will
last forever into the future.
The physical stocks of people and artifacts can exist in steady states
for as long as the resource "candle" holds out. We can turn our resource
candle into a roman candle and burn everything up rapidly, or we can
seek to maintain a steady flame and burn it for a long time, or we
can put out the flame before the candle has burned down. The steady-
state view advocates the middle course. That this or any choice among
the three alternatives represents a value judgment is beyond doubt.
The candle analogy misleads in one long run respect, however.
PResources do not remain constant in accessibility and grade as they
are depleted, because man first exploits the best and most accessible
resources known to him. The law of diminishing returns requires that
as we exploit poorer grade resources it costs us more effort to extract
a given quantity of usable resource. The gross throughput of matter
and energy will have to increase in order to yield the same net through-
put of usable minerals required to maintain stocks constant. Also a
larger f action of the constant stock will have to be devoted to winning
resources, and new technologies will be required. But the SSE was
defined by constant stocks of artifacts and people, not constant flows
iof throughput or constant technology, or a constant mix of artifacts.
The SSE seeks to keep throughput as low as possible (not constant)
and to direct technology toward maximum feasible (not total) de-
pendence on solar energy and renewable resources. The SSE is a no-
growth economy, but not a no-development economy. To take an
analogy, the earth contains a constant amount of mass-it is not a
growing system, but it is a developing system for as long as its
"candle", the sun, is able to burn.
Barnett, Harold, and Chandler Morse, 1963, "Scarcity and Growth," Resources
for the Future, Johns Hopkins University Press, Baltimore.
Boulding, Kenneth, 1964, "The Meaning of the Twentieth Century," Harper and
Row, New York.
Boulding, Kenneth, 1966, "The Economics of the Coming Spaceship Earth," in
Henry Jarrett. ed. "Environmental Quality in a Growing Economy," Johns
Hopkins University Press, Baltimore.

ii ,Fg S.ll-iii-''u. Set Nvi d iig:t 1 i1 iui~r'eil. qy w i:lt eI ,, i Ir, -,

I Iarvar.1 I~ 1ni ver-siy Pre-, ( ,i
tjeer. I flvid. 1 95. "M:i rhra ide E~Iz ,cSs for Bal ie" Bouild iTg's Pr j sa1 Jie-
Ise. Jiln. i]. '5. "Tie 111e4)ry ,,f "\alii as AI'lulled to Nit lirdi Re-'sur e>,"

.M~l 'lia Stuart. lb1. ~,'iriiiiplh.s ,f i'uliti'al lI~u1i,"y A tpplet, .n-( 'eat iry-
(>'orts, NtNuv YIrk.
Mishan, V. J.. 1572, -Growth and Anti-Growli What are the Issue 0",
('10AILMe. 11:15 J iiiej, 1973;.
S,,ddy. Frei .., 1G2., "( '.t e ain anr tiR cmir's The Beari g of I'll 3i-al S1 ence
U n St:.,t S0 N:: rd h ii" tIi l5s, 1 nIidon.


By LEsTER( C. TIjiRow*

NoOe o questions that there are limits to economic growth. These
can be seen in either actual eco mlnoic histories or fromn tI peIrpective
of econonjic analysis. In th e past v lyars the real peI capital (NP
has grownI l)v only 1.8 percent P0r year iII the Uiiited States.1 WYhile
ab en -r crate demand has some impact on the per
capita GNP in tie short-rm, in the long-run the limits to economic
growthh are et hv the rate oi" Inre'ase of produwtivity. Itow fast is our
U1)ljit yto p)ro"lIce the ("Iw ontput witlI leh s hours of labor rising ?
I Jovw fast is onr ability to ecoionh*ize on the use of non-renewal)]e
re-s11rceS increasing? Ilow fast is Our tbilitv to produce goods and
services without pollution improvin? Ill each ca~e there is a, liniit
given by the rate of growth of productivity.
The exact liiit ,et by the rate of growth of productivity depend
111) the l)plrh elfts which society fac(s. The most Keneral measure of
1 rodimctivity--total fac to prodctivitv-indicates how fast output is
gr-owing per unit of input. If there are no particular problems with
spl-cific inputs, it indicates how fast output can grow without an in-
creasze in the deniands for ipI)itts into the econoIv. The most common
mi measure of productivity-output per niian-hour-indicates how fast
iiproveluents can occur in our stalidard of living. If specific problems
Go exist, other produilctivity indices like output per tinit of energy
COP-Iu,(d oi output per unit of pollution produced set the relevant
lIi i ts. But whatever the case, productivity sets a limit to how fast the
economy1ii canl ('I'ow.
A s a C(], s(,(lce. the (lie-tion is Ilot one of liits-thev already
c xi4-lt whether we shoith lI delilberat elv sem limits to growth which
i ye blelv)w tlm )d Flv set )v the relevant Zte of growtl of productivity.
]iv casiest wav to dto th1) 5 is to analvz( time coiiseqUoeIles of zero eco-
rlIC "IcVroltl "(Z ( ). We iiay hot AVis1 to ipnlose liimiits this severe.
hit tw coflsc(llles of aillv iovelienit fro ilel we are nOW tow ard
Z1/" vill be ilia litat:vel v snI iilar to the ellerts (I Z1i it elf. Tile
c( )! h I WI# Nv fit1., I IE\ oY11 AN( ~ lwIts to ik ,oroveT 01 kioelC
,I- t w 'I I a:'], Z E is d' ra )le a d I( o kl!ete InIln(" tile institutilIal
.I ir s I I I V 1 Av 1 I )c we I c r t o Ii a Ie :0 a fcbi* a s( I1 Wc vp I
As. I Im:1 I v (ilei! leow-4 rate. tim onetine of ZE% arT s
-evee imm i ~ ci Ineit11>1i lit ioiial enVrl Iiflthat aill v -1erious ZI"( x
I 1w1ft ;i*l.11Ule -z~-:4ati chalnru., In the wvay In which 'tle

1 fv .r r o 4 e ~ i r. AI IT.
~ t', I I ,1 i c 3dl I v i rrs. I-: oh'lft oi rt1 of the Presidejnt. 1976 ;- Goveriini -n t
I'i liiii14 i,' \\ jii it~, JI '., pp. 172 dud 115.
(- t1


tr'I'liiit < r il illII;t (il i Oi I \ I, I

t~I~ki f) Aveii at I.:1 I 41I1I1. I LI I I iV \i I ofII \ n i i
1)11 xvli d ] ) -li1 oi elit(,l l', i. I vv Ii- I I I 1 t : 1 h. x I v
t( O U ii ) fill I ( 1 :1 IPu I t)V I )' l I I 2 NI t 1 F 1 0lrl Aa ) !i,
01l ), _, Ill tl V( ))1 il a I( l)Iil ~ ~l Itl' i( ,'W t l11f NV ~ s I r re ) I t (m i i.,
buta , N iI-i,0 (1)tI) )iC i a :11V ;il Ik11 I X(II l l ( \ ]I '( 1~ 11 ,tl~ t !"i.
bil; \~ t l' ll~llIlllldS 11:1 v 11 re rwi i ) kf,. I'.l tr l ll ~ l it''_ I :,' .,

lIIt'U O l() I 1X I~i( lt\l i )!.m ', iI t ) I \I he i t ir T 1 w ,

a re nti (Ijlt I 01 l liaflia it vtI -Iw,.i It) Hl l r1V 'M.i 1"11 1wa !1 N'
l]e iiiail e iii Tit oe(, flit l) V )iii i w il( i iII < i r. I, ,.
arllo ii '1 id vi i 1 () iS A l Id eeig, Iime (I1' ni I I, e1l I 1, .-
pollution. I I l t ,e ]),'I t :i C '0110)',nleil >L[ i --l" 0 SiI. Wv :
!)l'O~ l'ess ()(t, lll'.q Ilit Nl~ l>c)il be) 11,14o In the etolhic lliev \Nthi w1)I)1iI (li:1ti,'o)t)11li 11" ZI(;
1lo t l iii ew p i OI'twe.-" ( tlt I )I 'i (II to r liice A e a. tPil--
ti, 1i "' istoI i fill l fiit ,It i O ixe, l I )(O. hiie i Vt' (i(01 w 1iii; e ,P l V
statIC eolI lll i- i t IVl() I I )cr i leit 1 1l* l O 11 ) v ll- i I it e'1,v Iir i Il vi
Itrla Y o freze I e PcfS11P lt -ew t r ont a 1 I n I l ie 11 -,

P n utI Il lal eril!'nuii it.V iveii i 1' lit t,/tt il < +1 1) t
dos l0 t .1 ldl to eilear tlu lthe op lp llts (w1i I pl' 1 :w 01 d ZP, ,E (

1. iT I)('I vai' I St ) I o [ C )N tlI A' Tto ( AtESOVt&' ) N 'U1

si orwdot tilaleo r mn) orin telyv ]ost-el'or (l W ar ii Al'a' 1;'i >.* i,,-
lionlic history1 Is f*11ll of per')iods of >xero or llo0":ttiloe( (,(C0))id>ll*0 4.2F W }l ..

SIi!, 95e I st- n of.lifI VInll PlllI[ aii .' l
uin 1 19.-) t' Ii)- ,' ) 1969-7, 1 ii ). ,"i (11 11, a\ 11 -I)-
videed uts wvii 11 !)ewatt~d experi1110liis ill z r(,1 ,)110i VC0101o',v4" w l. \N, ''I',,
nierely analyze thw(,e' ," ee.s1Ol1 to e, AVliam woubt~ ]it.1pen, ill thie I, I I-
relit Institi onal;' li eil 1t. (G iVe i 'Ill iIIC(! ( il !\ ,
cenlt p }le' l]er VI;II Pi)70 tol .) iti('l():f ilTO:i1-1 i). ii m 1'p()v' ,w !J ,
(4i V('IA lli t I ) '" /-e -'.(I pm l ei .3o r. ;'\(, 11 1!
slowdow11ii ll i (1(, rate' of! l()v of thie ] )m) '). v I 111f <' I],'-
n111hlil '"T W,,O )lM drop) into tile to!: 4( nl ]i 1ll it; r(, .:il~l im .1,, J)
nali~tv r I m-i '.Z" l.id>l(),Vlli ni tel(.

ph tfi ll)\ of It v eil)W wTil e cI1).b l),v) ili' v v ...1'. ',! .. ) -j ,
ot,' ,,iilp o ii 1J Iite ill T.1lilc 1 wl')1ildl (l"~,. ()x ,cr t llw, i w
p m l io ll o)f thle wll ,i ] l < v '{ \ 1 )(w, Nv f i ( l ll ))p,'] m." l l!!! P l l.)i i '
tl M2)'lr or:( ]i; '
:,'l."l 'de)' l(, t i -J.~lIrd ,illy lI-*s, and{ tll( lllul l ( 'i! ltll i{V l>lS C ,''< I(1 '


TABLE 1.-975 nemlfoyIMnCt rates
Pereni1 t
All oik1er .- .
(';t1 --xcs 1 -)-1 _-- 19. 9
\11,,n 20 and over .... 6. 7
Womeu 20 and over- 8. 0
Whit __ 7. 8
1 ---ck 13. 9
1 4,Uncii of 1,onflniC Advisers. "Economic Report of the President, 1976 ;" Government
Priinting Ofliwe, Washington, D.C. p. 199.
/Z11G would al() impact tihe distl.)utio1 of inme, As our economic
svt ( N, 1w works, tile distribution of iicoIIIe would become more
1ili(' ,uu 1 at (qiite a rajlid rate. There are niany ways to measures changes
ill tle (ist ribut ion of incolne, but one simple technique is to look at
L I 'ap bgtp lwveen fanilics wiHO are at the 05thI percentile of the popu-
lation and those who are at the 75t h percentile of the population. With
ZE( i this interquartile range rises by about 0.2 percent per year for
whites and 2.8) percent per year for blacks. Since unemployineit and
reduced employment opportunities strike blacks harder than whites,
the black income distribution becomes more unequal at a faster rate
than that for whites. Moreover, black family incomes fall relative to
whites by about 6.5 percent per year.
Since the models that generate these results are derived from anal-
ysis of short-run periods of ZEG,2 I would not argue that you can
multiply these numbers by one hundred to estimate what conditions
would be like one hundred years from now, but they do indicate the
direction and magnitudes of the initial changes that could be expected
when the economy reached ZEG.
The male-female job problem would also be intensified in a ZEG
society. In 1975 female labor force participation rates were still 32
percentage points (78.5 versus 46.4) below that of males.3 To achieve
parity with men, the labor force must grow by about 27 percent even
if the population were to stop growing. While female participation
rates will probably stabilize at a level below those of males, female
participation rates have been consistently rising at one-half percent-
age point per year since 1947 and show no sign of slowing down. One-
half of a percentage point means 400,000 more women are looking for
work each year.
In a ZEG world, these is no way to employ more women without
unemploying more men. Which men are to be thrown out of work?
While there is ample evidence in rising participation rates that more
and more women wish to work at paid jobs, male participation rates
give no indication that men wish to be "liberated" from the world of
paid work. There is a slight decline in male participation rates due
to earlier retirements and more extended periods of education, but the
voluntary declines are not large enough to make room for women
and are non-existent among prime a e (24 to 54) males.
The income split between old and young depend upon two quite
different rationing mechanisms. Because of seniority provisions, older
workers are less likely to be laid off in recessions. Once laid-off, how-
2 These calculations ire based on the model outlined In: Lester C. Thurow, "Analyzing
the American Income Distribution". American Economic Review, May 1970.
3 U.S. Bureau of Labor Statistics, "Employment and Earnings," Jan. 1976, pp. 134
and 135.


ever, older workers find it (lilWillt to fiiidll('w eH yll(yl"tiI il. A]V'] I'j W
form er effc t doi ilatcs the l;Itt.r ell +t ......I.I (i, to :a i -1.,i } c,
gap between old aiiill ,il th re is a ool"m"p o)I*' wo,,rki; wo,
are severely lan(licappl(( lwil period-. of ZI(i.
I here IS also a, (4 1C1WO1iou W)I I ml~It rJ))Jt I1W: 1 i ie, fr tI lIe ol~t
These opportiluitie5 ci, rillI'ItI lV tmi-I t Iwo po iln litI If ie V Wii -
ing for soineo li to rletir or W i or ((4) akirs,,'+_ ,,, e (4 ,( W(,,tn :.
trI'Mwth and th 1w enlerationl o)I letW, not. a- ve(t flled, opor ;t ) .
a~ Z1EG wvorld,1 someone iuuis dio mr uvt ire br)I >u i l i t, -I pro~-
roted. I (o not, prtei(l to he l)( -VNchlo i't wl,', col tll -1IfV to
whlat effec t t]li re(luelion in o1porti-iifies wIuhl hay( onIh t p vele
011 1,11e volI1mr, 1)1 I( is no0 jIuest ion that .onoin- :
aia l)Ie ill a /LUG world than Ill a1 NVOIld 1wr piifI
g ot new oppotiiinilitis for votnlln people wolld :fl'i O,+ the
normal rise and fall of inldividlial in t(Iiit- ies. 1ut thllis >olr,.e (, ()p-
portl!Itv exists llow and this would not b(e a new oitrw of jl)
opportunities for ti voung. In abolition, indiistries wouAld prol ,] lv
rise and fall much more slowly than they now do. With both1 all ,1l(1r
population and the allocation of a larger fraction of total iIJie to
older workers, cojis umption patterns would be more riiod and opp-or
tunitios for dramatic shifts in consiuption would b e more liniit ci.
This effect coupled with the absence of new pUichlasing power woild
probably lead to a much slower rise and fall of individual indi-tries
than now occutrls.
If ZIEG is not to imply a falling real standard living, ZEG must
include the achieve-e nt of zero population growth (ZPG). If popula-
tion growth continues at sliglltly less than 1 percent per year (the 1970
to 19775 rate). the e the per capita G(N must fall lv one I erceIlt p er
yeaIr. 11Wh1ile the fertility rate has fallen to or below the level necessary
to s4al)ilize tile 'opuilat ion in the 21st century, the fertility rate would
have to fall from ithe long-term ZPG rate of 2.1 children per family to
a slort-run ZPi(- ra te of 1.2 elildren per family if the popIufltion were
to b~e stabilized at its current level. Tnless this were done. ZEG could
not be implemented until early in the 21st century without forcin," real
reductions in per capita standards of living.
while e the negative aspects of ZEG are substantial, there is a posi-
tive side. In a ZPG world it is possible to reduce the investments that
we now make in educating the young (there are fewer of them) and in
equip)pin, the young with the average amount of capital (private and
social). In a short-rim ZPG world-i.2 children per family-these
savuins would free enough funds to raise our real per capita living
standtards by alboult 11 percent. On the other hand. there would be some
co>t S*4 If we shared work more than we. do now, there would be extra
on-the-jol training costs. If everyone retired at 45, for example. you
would need to train 1mre people in anV reN period of timge. ()TT
training {msts are (liflicult to nueaq re. hit they VOuIld certainlv eat t1p
n0M(' s ulbsttfnt ial fraction of the resource wl z ih were freedl inl formal
education and physical investment.

These eailiibi ttonn nsInne that e'duca tion coit, can hP cut In proportion t., the r+ I +,
tion in school enrollment a nd that invesPtment exp#'ndturog cn Ti +'ct In 1rn, ort W O
the rt!eti in th1 number of workers In the economy who wiut fe equip;c! with the
arera ge amount of ca1pital por worker.


If income were the only benefit flowing from work and work was
really a negative good generating disutility-i.e., earnings are a neces-
sary bribe to get individuals to suffer the discomforts of work-the
problems created by ZEG would be easily solved. Some system of
transfer payments could be devised wlich would (1) sustain the in-
comes of those who became unemployed and (2) encourage those who
do work to work less and share the work more. Given the hypothesis
of disutility, everyone would after all like to quit his or her job if
someII alternative income support plan could be. found.
The basic job rationing problem springs from the fact that jobs are
more than a source of money incomes. There are a whole host of con-
siUnqi)tionl benefits that flow trom jobs that have little to do with money
income. These nonpecuniary benefits include friends, status, feelings
of accoml~lishment, fame and power. Some jobs in our economy would
h, worth fighting over even if they generated no income. These bene-
fits all come under the framework of producer's welfare. To whom is
producer 's welfare to be allocated? This question exists in every so-
cietv, but a ZEG society makes it more intense since it is not possible
to generate new economic avenues to status, fame, fortune. and power.
To achieve any of these goals someone else must be displaced.
This brings us to the question of whether a ZEG society would be
a more or less competitive society. Unfortunately this seems to be a
question where there is little chance of nny firm economic answer. Im-
agine a world where a larger proportion of the citizens are elderly
and have relatively fixed consumption patterns, where incomes (1o not
rise, where most of us are customers of existing firms. and, given habit
formation, we do not buy as many new things. With few opportunities
for advancement both the economy and interpersonal relationships
might become much less competitive.
But it is also possible for the same factors to lead to a ruthlesly
competitive environment where we are at each other's throats. Given
that there is a fixed pie, we fight over its division. Where some of
our eiieroies use(d to be devoted to enlarging the economic pie. all of
o11r energies are now devoted to dividing the pie. If you look at ther
areas of life, zero-sum games are hardly marked by an absence of the
com)etitive instinct. All sports are zero-sum games. In every game
there is one winner and one loser. The winer can only win if someone
eise loses. Yet sports are marked bv an intense competitive spirit.
The current economy is not a zero-sum Came. I can win without forc-
ing you to lose. If it were a zero-sum o'ame, we 0toe ore
competitive. liot less competitive.
As far as private industry is concerned. lle zero-sum pane aspects
of the economy would 1)e entirely new. Industry is geared to growth.
but gro, wth could not ocur in the agoreoate. AsI with individuals,
one can write a scenario where the economy becomes more industrially
competitive and one can write a scenario where the economy becosM
rlfllC mono polistic. At this stage it is virtually i ipoC.ible to predict
xvI(Ii of thlise two opposite scenarios is 1o14 likely to occur.


(, i')t the advoatc ( of /%G IT PO(I(I to 1 l& (01i l1I'f2nl l
lavt. I ell oitlineil i eci() 1 )I I :II(d 1I lEy a1Il"ii!. ii 8 Z ( i (V
11()i, allv ll:(",Ii l ZI( i. ZL( doe no) ineli zero e10iui ,e .rl)v Z ,
all. i ut zero eco() 1it, Ir I Ih in >etors t hat IuI Io -,I ix V%,I
WI!) i,. lesomI '5,e4 o1 ill -v(t0I' t at p)Olclte,. etriifItm \Vf lh1 I le pl:Iid 1A.

Pi,)lde 1 1 (fl dI)Q av )i (I L) expa)idin&t jol oppo iti ."i ii tlie
ervict e'Or t c olff:-ei I Iir! Io 111lo'2i(' wi.
W,11ile t!he service secPtor li-, certainly Vown since W ( I War I1.
~11 I1lort ailt to M i d It0l1 lllit- U -I]1 mil i e 'v
sect+ H' include evervtin l at is not nii I !, 1118.1) fad yin w_.; or 1i lii)+
T'!! he wordl 15e'\i'Q ()ijlQ pvi ioiis; of p"rsoil* 11111 111 1'
I~ti in: sev'iceS, but b hew e ty es of I'viees h ave in fa't been I 1-r-linin,
since World WVar 1I. 11u1,h of ille Sevie sectors is ilv ii c,+(,
serv ices that are lieceiarv to pirOdice, ditri ,Ite, a rid ie 1 o,),). :I le-
11a powerO~VP })r c.: re sil,) i)T1ed*iI1ts necessary to service tie "O(Isc, w .
WVithout an mcrea. e in the sul))p1v of goods, these services will quit
Lr(,vins. ( )tlierwie. ilie rrowt h in the service sector' has occurred i
education and health. IPoth of Itwee activities are ]Iart,, Zcal;e' ;ct vi-
t ies i bat involve >n} hstantial capital investments. Larce c ianl P e: of
"oI are consulned in the process of proin(i educaf ional 0!. a,
,rv ce If we looki at other service industries such as utiiitie or
tiiiisj ortatioi the n'o 11"111W)n ifl of non-renewable re5ouvrec' and it
pr(>, V'ti on of pollution are immediately evident.
TL. l)8sCic I)r'o}lem is a failure to nake a di;tilction )Qtw( ,n the
di!',: a d in(lirect iml)act of any economic activity. V,n ve's i, i nay
ee,a e *1 ittie direct pollution bluct1uh nir1 1401ntlitt i if one
looks at the probhcts that they Consumne. Take e411,calio1. Wi o i- the
la _+: t privatee (conl>Ul er of electricity in the 1o1 on ai a ? The Ma:-
'aiu., t]' InAti ute of ilelnoloy. Who is the second lar, et c Mo-

suifle' of e r',e' itv? The affiliated hospitals of Ilarvari. IIo.}U>ils
golld,.d p hard and: soft goods at a prodiiOis Ve. When ind i rect
aUct :v'ii i are considered d it is not all obvious 1that we have 1wI of
liea It :1 ae and li of edw.catiolN with out pollution or tho1-'ue of n)1-
re) ,wable re~ourc'es.
i[any of thiv who think that they live and work in a clean ('n-
viBT1h ,1ent and thli't they conserve natural. resources mav fiwl t ti:at
willvi indirecIt (lelandS are i11lded, thev are s:v(, of tlle world "
great rio, lte, and consunirs" of natural resource-s. 1n' anw-vWr will
onl V 1 known -when imput-olitput tiall(es have b1een noIi tied t,1 alL w
for. re-< ,11l w(' 1 e :0 ,le to) shiow th e ifldliI'e(t as well ats tlie (Ii re(t (ed+ (lt Iyl cs of econoie nacivities. Ix i.le ei y jrOVP 1, 1,e a. 1i il l
n er of areas in which the ec,onmv could(i (row v.itIhot n-in:-c
res Or 01' aenerntin Io ll,,>loion, the,-, are )t f 0le veryv 1iw ik 4 in
TI and ino.zt a- irel do not ilcill(le liP>'t of tat i' oliiallv
<'l8-?;ti a result tlere is 11)(:aiv way to evnae the !)llL,,+ oiithm d
il -,t 1011 I and ITI. If ZEG i- to 1w. acli jved \NiO lO t Ie aalveise


effects mentioned previously, then some radical changes must be made
in the mamer in which the economy works and in its institutions.

The attainment of ZEG implies an ability to either satiate or con-
trol individual wants for more goods and services. From analysis of
the process of want creation we know that wants are to a great extent
a matter of relative position. People that have the most goods and
services are apt to be satisfied with their economic position regardless
of the absolute amount of goods and services they have. People with
the least goods and services are apt to be dissatisfied with their eco-
nomic position regardless of the absolute amount of goods and serv-
ices are apt to be dissatisfied with their economic position regardless
of the absolute amount of goods and services that they have.
Today's underdeveloped countries are not underdeveloped relative
to their past or relative to living standards in Europe and the United
States 100 years ago. They are underdeveloped relative to the living
standards currently enjoyed in Europe, Japan, and the United States.
Having low relative standards of living, they object to the current
performances of their economies and demand change. Let it be re-
membered that today's underdeveloped countries are the ones that
have come closest to achieving the goal of ZEG. Let it also be remem-
bered, however, that ZEG has not solved their social problems or
made them content with their economic position.
Given the similarity of human nature, this lack of contentment
should be taken seriously by anyone proposing a ZEG policy in the
United States while the rest of the world continues to grow. Such
a policy would eventually turn the United States into a country with
a low income relative to the rest of the world and bring the same
demands for economic changes that now exist in today's underdevel-
oped countries. While it is logically possible to imagine the construc-
tion of a culture that could sustain satiated wants in the face of notice-
ably higher standards of living in the rest of the world, there is no
such culture now in existence. Rising real standards of living are a
universal demand by everyone except the person or society at the top
of the economic heap.
Tn the context of ZEG and other countries, a falacious "impossi-
bility" argument is often made to demonstrate the need for ZEG. The
argmnent starts with a question. How many tons of this or that non-
renewable natural resource would the world need if everyone in the
world now had the consumption standards enjoyed by those in the
U.S.? The answer is designed to be a mind-boggling number in com-
parison with the current supplies of such resources. The problem
with both the question and the answer is that it assumes that the rest
of the world is goinz to achieve the consumption standards of the
average American without at the same time achieving the productivity
standards of the average American. This is, of course, algebraically
impossible. The world can only consume what it can produce. When
the rest of the world has consumption standards equal to those of the
fiFor an exnmnle spe: W. G. Runlnman. "Relative Deprivation and ,qctnl Juqtfee."
1toiitlod r and Keman Paul, London 19r,6: and Richard Esterlin, "Does Money Buy Happl-
nes ?", The Public Interest, Winter 1973, p. 3.


U.s.. it will l)e producing at the same rate andl proviidilg as iiiICl1 (,f
an inicrenient to the world-wide supplies of g(ods and se&rics. a- it
does to the (teiliands for roods and services.

Given that ZE( T implies rapidly rising inequalities 1 otli aIjptptr Ig (
within ui)I ps under the clirrelit institutional arrangciiints. v} at
changes in institutions would lie nece-sary to reserve a (list riltiOn.
of income and wealth that is no more unequatl thii tlat wvhilii cr-
rentlv exists. The basic problem is one of rationing work and k(. uiii
standards of emuployability from rising to exclude mst of tlio e at
the l)otton of distribution of work characteristics.
The work rationing system in turn depends upon the nature of tle
income transfer system. The basie problem ith transfer I iiiit
systems is that they can be easily used to establish. mini m, lor
to consumption or to achieve complete equality, but they are v\i'V
difficult to desigml so as to provide a distribution of income as ,unequal
as that which now exists. One can imagine lottery-like transfer pay-
mient systems where unequal incomes (transfer payments) were allo-
cated to different families, but it is difficult to lima'ine tlat si(,t1
systems could politically come into existence. Thus it is likely that
transfer payment systems will continue to be used primarily to (>tal)-
lish consumption floors and not to determine the distribution of inowiw
above some minimum level. This means that to some substantial extei:t
differences in family incomes are still going to be determined by wo(rk
and earnings. As a, result, the work rationing system is com',r to
become the prime vehicle for assigning different families (tIi ITO renit
positions in the distribution of income. People are going to be rich
or poor depending upon exactly how work is allocated.
The basic problems of a work rationlinf sytem are identical to
those of any other rationini svsteni. Wlat is ai fair distnitiii of
work and how can the rules irodo(lcim this (list riblition be en forced ?
As the data in Table 2 indicate, the I.S. work force is marked 1, v a
wide variance in the nur lers of hotrs worked by different unen1 wI'S
of the labor force. Almost 6 percent t of those emnp iv(edl wlorkk lvss tlian
15 hours per week. At the other extieie. sli,,It1l over 7 1)erce'''t of
PI NO~. (ie ersiiii,)IN
those employed work over (0 lhors per week. L II \' >
to limit the total niiml er of hioms llt hat anyone cu"n Nirlk, omilv a -! i:i l
fraction of the work force would tiid t liemselves wi t11 lower ca:'Ii ,,2'
until the limit moved l)elow -1) 1l11,s per v ecUf. Ilis. (wev.er woui
put the entire earnings }urden of ZE( on lhse \\ ho 10w wr, ilit'
most. Their income would gradllallv fall relative to) Ii t. of tIio e whl
now work the least. O verI tin!ie tlie dlfe i wotiii
gradlually Ibccoiiie iiior-e ecymal a> hours olf Nv ork 111ec m ,(" '111(anl 11o re
equal. Abs-olte li unit Sc()1l datl'-) cil*11 ico u'a e a 1ifith:-~i i
num1l1iber of seco til falllilv V lvS wit 1 a Om jt'lli'it 1iccl t ( l'vd '
the maxillu1 1 lmlr.13 of work f vNvo.i I!IorI tIi \I a" o" timuill]v i I 1.

TABLE 2.-Hours of work per week in 1975 T
II~A~r~:Thoae employed
I h(Pervcnt)
1- 1.0
5 -t 4.8
15 2- -- 11.7
- - - - 421.3
4148 --------------------------------------------------------10.2
49-- ...... 8.5
Gl) and over 7.2
U.S. Bureau of Labor Statistics, "Employment and Earnings," Jan. 197G, p. 149.
Aitother option is to cut everyone's hours of work proportionally.
Tins has Ihe ndv(IaI (,I Pr of preser-Ng the current distribution of
Carnings, but proportional cutbacks are impossible to administer in
aivft'l i other tlia11 very short-run periods of time. Given a very
ra pi turnover in the labor force, workers would quickly start exag-
'erating the 1111nlber of hours of work tley were seeking in order to
thien the number of hours of work that they actually want. The
0istorv of actual work pattern s would rapidly fade out of existence.
AS a 1ectsziiit- 1 p )ort i al cut-backs are not an admi Istratively viable
option over any extended period of time.
As a consequence. an absolute across-the-board limit on hours of
work would seem to be the only long-run option. To prevent the in-
Luce increase in part-time workers, the limit would have to be set
in terms of hours of work per lifetime rather than per week or per
vear. This would prevent families from evading the rationing sys-
tern by increasing their numbers of workers in the paid labor force.
Teenagers would not work to supplement their parents' income be-
cause to do so would reduce their own-adult earning capacity.
The economic costs of absolute limits on hours of work depend upon
your estimates of the relative importance of talent versus the willing-
ness to sacrifice hours of time. As long as we are simply talking about
hours of time, there is no economic loss (other than extra training
costs) when one person's time is substituted for another person's time.
To the extent that scarce talent is involved, however, society is de-
liberately Cutting itself off'from the consumption of a unique resource.
The more unique the talent, the more the cost.
The major enforcement problem would occur in the area of paid
hoiwrs versus actual hours. There would be a strong incentive from
both employees and employers to devote substantial amounts of time
to llnPaid "preparation for work" and then to pay very high rates
for a few hours of actual paid time. This would allow employers to
:uvoid restrictions on hours of work and enable employers to avoid the
trainincr costs of having more employees. As a result, there is no doubt
tlat there would be severe enforcement problems.
As mentioned, any absolute limit on hours of work will lead over
tuie to a snore equal distribution of earnings than that now in exist-
ence. ZEG and a more equal distribution of earnings are to some ex-
tent complementary products. You cannot have the first without the
Since capital accumulation is allowed in the dynamic version of
ZEG. the entire distribution of income (earnings plus income from
physical wealth) might become more unequal at the same time that

the distrililt iol of e:tri11g : i wc1 i,,.i 1., W1 l1la1. If ,
COllie riscs relative to ea dIllet o ll tl VifiLI jO!] otf ic'- V* A

slare of total ii)onic t woil(I il1ClQ:1-:. IIL ()IIIV W V tO lievuit ttoi

similar to thoe of work rat iou1ii ..
th It (a l *il a
Like other etos(J1I lie eeoollmv. theiaor W1iuI nQ'P
would flow t l()vq tilw lack of: grow It it t ( )lit \ t .
ment, goreruin ent le veies 22()-Xv lU t !' ilt i i I :' I
of the econoliiv than thl( do h)v 1"' UL4 0 lx,. \\i } a a-c :
GNP. governnuient reveulues wolild als, e z, ttie. An\ 11ev:1 x-
penditire progrrans would have to be fi1)iie1 bv tui,, ol ,
(~)liilie ~ )gI 'atiS OF I'1'" U'SU1( utI m1.
eopendit tires.
The (de'Wntd for public expenditures would, l1 Vr' bte ,n>: 1
to giow. Ultimately public expeji(1itulre54 are Cont voleo } v i', t ,to
facto-s-tastes and in:come-tmiit Control private i', i Ii,
expend itures grow because there is a, po-it ive 11W, 1 (-iio, :
demand and rising ie-s. Pa rtia lIv oIT't. in ,1ft I "i s i a z II III
expenditures dNe to a ili ,rlalvti plico for public kliiI
normal nea-a1i1 lvc price elaa icity of den jad. In a / Lir i td ai -
tire income elasticit vof demand would have no i }m t-in,, s w
not be riszngt-lbut the negative eil(t of riisin relate iv, .l.'. I 1
still occur. With )1)dilt) vn fater' in tue Ava-,, t: A t
the public econotmN, public ,evOmlhl bekourie me ue x j'-,
relative to private goods and services. As a re~it, deuiaii t
gradually shl.ft fromi pub]c croods and servi os p lt-civlee o 1< III(
-ervices over the lon--im. 1Th1e S ed of this siiit wt ,,aid ejPe I 0 1
ths ehfano11s 1 ) c0c a
the cangesii ,reat",I e prices and i le size o, th e !,,'c i,, la~ti i x'
deuna nd for pu!)lI* e"oods and services.

VII. CoNcIuSioNs
In the dynamic version of ZEG wlcie avanee in OdlcI V 1 ye
per it (,J. Z1! autoii t jely Iead-; to t-:(,v ol PttI I X it
ural reburcee. hlt it does not 1, tlkItt >P] ; I 0 } li 0 i. i -
liltion (iIlI oLl' )1li 41 a lwivni l v''U l
co-tly meth'o of di-ol-sin of 11n)v l 1 ',i I i ,-
o r:.,lylae (lis)o-'; l. Bult S~i e iii' ,,r.ne i .- ,iov :v' l, ,
tOf P11, IXI I 'AU- v w111(

Incentive system ,. (')ur ,''Ue>iUP i- ,,' :i i i1I11-4 1. !X', : '

1 C pi'ereinti'd. in eithV I' U E ()U' a !rPVO)X\] tII lViI'hIi I, h }) : I

* Xvleth.'r co pit '1'sot f!n'm. woIf or wo-i I (ot, '} -D,-"' fIP" o Ii 'm t1.( 1, -1 r
nlut 4'hflrwt If tile $2~ u 'Itvy o~tp t x'th rop t,, ,'i t ii I- ,t ,. 1. 1. ,xt r T
hrase v a ,l t o u t jIdial r s I" '' '


reat i e (osts of different foims of garbage disposal. Thus those in-
terested in less pollution shold( focus on chang.ringr the incentive sys-
tem rat lir than ZEG. ZE( L( y it self simply won't lead to what they
While ilon-renewable 1turl1 resources certainly present a limit
to eeooic growth, the limit is not zero but ien li the rate of in-
ca ~In our efficiency, in ext ractin and usingnon-renewable natural
resolves. There is udoubte dly a ignite number of tons of copper em-
bedded in the earth. but the econoimc supply of copper is continually
,rowingr as we learn to use copper more efficiently and as we learn to
ext ract copper economically from lower and lower grade ores. Thus
ZE( imlies an interest in setting a limit to growth below the limit
set by the economic availability of non-renewable natural resources.
The reasons for wanting to do this are certainly not axiomatic, to say
tle least.
If ZEG were simply to be achieved in our current institutional en-
vironment, there would be rapid increases in inequality as more and
more people were forced into unemployment and "unemployability".
Inequality would increase on most of the major dimensions that now
exist-family incomes, male-female, white-black, young-old, etc. The
effects would be similar to those of a recession that gradually got worse
and worse. Output would be fixed but increases in productivity would
lead to the need for less and less labor, while more and more people
were coming into the labor market as the result of population growth.
If rising inequalities are to be prevented, some form of work ration-
inc would have to be instituted. To be administratively viable, work
rationing would have to take the form of an increasingly severe limit
on lifetime work. This would lead to a more equal distribution of earn-
rngs. but increasing capital incomes might lead to a distribution of
total income that became more and more unequal. If this were to oc-
cur, controls on savings as well as work would be necessary to prevent
rising inequalities.
A ZEG economy would necessitate a substantial increase in eco-
nomic controls. The problem of work rationing is severe as long as
work continues to be a major source of incomes. Individuals want to
increase their own incomes by working more, but government must
prevent them from doing so if ZEG is to be achieved. As a result,
there is a direct clash between private incentives (the desire to raise
one 's own standard of living) and the social objective (ZEG). When-
ever private incentives and social objectives clash, rationing systems
are apt to be difficult to enforce. This conflict could be eliminated if
there were some technique for eliminating individual wants for more
goods and services. This technique is as yet, however, unknown.

Ti14 RIBL)EMSI;4I: AND ( ()NSI,(,L'Q!N(i*:S OF A\ SII)V No
(BI() \ 1II (()N(nI

This essay's purl'1)0> h> beell to d s lsYi; ('111'latt.1ois ti(s and onse-
quences of a slow or no growth e('oiollly. The lh'ee preemillenlt fact ors
that shape tlie economy Of tie futiu1'C all(I (1001-i111nc a)pro)l)riate
p1lic poliies ae (1) hesource av(2ilalility, 3) teclllo,)gv, anII
(8) values. l,,a(1:c of these facto rs interacts with tlie other ill IlnIPor-
t y. Prll lite Iiiolt orenc'a I con i-
tant vet often unforseeable ways. lI'lr!aps It Kx'ia i i-
Sion that eonl'red froni tle analysis is th:t valie ,lcianres will be
Sih(i'act c of the steady state society.
The first section examined the post aflhent prospect. The post war
economy prI'ovided Amiericans with rates of i m'reases in li vin, stand-
ards that. cannot be imaintained because of increased international
competition and more inportiantly tle limited carrylig capacity of
the earth's resources. As a result of claned e(oo1i1Q Pro,,)ects, a
period of social tIrlal)elice lies alead as new values and iiistitutions
evolve that are consistent with ecollomic possibilities.
I)uring the next, twenty years tle econonmy will change from one
where crrowthi is tile exl)ec at ion to a st ea(1 state. Tils stake, ternled
transition. will be a period of significant ecoionlic disloat lolls. While
the term illJ)lies a tenlpo'al' situation, transition will be thought of
as ti permanent stale of affairs for niny individuals.
] )iuin t ransi io)n
I ho silb,lcto( rs (f tie ecoi1y wll ',)lt i11e to (Xi)Q i'Wli('T
"r'OwI Ii a id t(,fille. >ect't()s usv i 1ir lIh' rcal- i V >rai'e )V'> I( ri S
vill ex lie.)'i'e p)r 1(e i n(r'a ses as well s )wit puit dec'rca -'s. ( )t icr
s( Ctors will !c ('clhar',('rizevd b price de(,lii w l)eIlse as iiieolies
fail to im)'ea (,. {ldemiand will fail.
Critical shortages could cause ral)id price incr(,-ase of the
iarlet ta ls to aInti(ipate correctly fixture supply and dllnand
c011dit ion.
So(-ial stress could crystalize around ra pid price increases and
critir'al shol',4,gcK So(ial disrillot11ns mvio inure likely origiv:itc
I )h J. lI l r (Ph. D., 'con oni Ic", West VI rtta it : ,it vrr- 1, Prf' 0,-or I -i' i A ffT I
and Buslness Administration, Unilverit4y of Wisconsin Mllwauikre, Wk.
;air ( ppq)-rt (Plh.lD., lciwn les, Syracus(o V'nlver it\) i sAs,'t lt (Cww al ( (
P I '1 11 of Res',areh, l'la I ni ni n Eva Ilan II I New .1 er 'S St I I e I ,'' I ( Pr Im' ot f Inra-
tion Tronton. N.J.
* This paper is a response to n requtt from the staff of tie Joint Eloanomic (om-
mit teo for a paper on the consequences of ,I slower growth ,(onomv. 8ii-g,,-tion from
lu ,rt 1 I amrIn nI' the Jo-int I n ("o)ioi tee a\ re e i' fIl. p10e\ i, l ,(t* 4
0 '':4 t o ) )obert F'. \\'he(r f itho' N' .o (, -wy .',I l)('Je rt I I t f 1.l'a on fIr 'I
i U r %vit respect to the If( ritil ti ion of the he w I tPo f,'n t Iit 14ven(ent.
( 51)

with groups in Ile maiinstrla l Cidd class of tie economy since
they N- iV 1 1eittp i to createPo1it disturbances.
LIdor will be subtitute(d for energy-material inputs. A special
case of this shift will be the increased importance of maintenance
Mobility between sectors of the economy will be a principal
mechanisn. for insuring that costs and benefits of the micro-
dynaii, sIifts will be spread throughout the society. At the same
tIme. individuals in growing sectors will attempt to limit mobility
so as to "lock out" competition.
Chan.II-(,s in the work place will occur because workers will want
more sat isfving work and because there will be fewer growth
firms. The increases in the service sector will demand new kinds
of interpersonal relationships between workers, management and
Jntrafamilv transfers of wealth will become more pronounced
as accunmlations of upper and middle class Americans in the last
decades are passed through to offsprings.
Family life will experience "innovative tinkering", but the
basic institution will continue to be the fundamental social and
economic unit.
Values will change : the roots of the change are already evident.
The values that will be formed will be affected by public policies
during transition and will determine the character of the steady
state economy.
In Section III, answers are suggested to the question : What kind of
economic society will evolve in a future of material scarcities, slow
economic rowth. and structural dislocations? Two polar caricatures
were discussed. In the Hobbesian future:
Individuals both independently and in groups will compete
with increased fervor for a larger share of fixed total income.
Values will center on wealth. consumption, and position in an
economic hierarchy. Status will be derived from similar factors.
Politics will be dominated by issues of income ditribution.
Inequality will increase.
The opposite scenario was termed the Emersonian future. The Emer-
sonian future is characterized by a view of material wealth as a means
for attaining more satisfactory lifestvles and varieties of human
experience rather than an end in itself. Among the features of the
Emeionian steady state are:
Increased possibilities for societal and cultural growth.
A florishinz human potential movement.
A variety of alternatives to traditional work.
Intolerance of conspicuous consumption and waste.
A broadening of the educational process.
Icrerd citizen participation in community affairs.
Collective consumption and sharing of infrequently used dur-
aiJlP g0oo15 will .3,1ICrPcdC excllusive. individual consumption.
Tr., of ionsn file decenrl,"ized1
In s~pe of th e changed values and ",intitto h eetaie
market will remain the priaav means of allocating resources, and
rernlatinff technological innovation.
The final section focsed upon public policy isev. There should
he tNree stizes of policy formation:

The articulation lihn. e i a )Iriod dirini c vi wh icl t1,o i lea of
slow/no (rowt i )e(' an inter:/! l rt of Iul i el ia I e. T is
stato is (Ilearly I )I rogv>.
rlit IinuaLienie'it of tra:nl-it Iolh:l e pIemd th e jeri,),t +liiri"Itr
whiell policies d 1)0i nevd to Iatail' a ,at < ,ocIeta
Thie, develolIuental llifl-' is the 1)'1onl (luliillr \ nw iwiVi i-
tiutions and relatiolnshi)s of tli', stead v1 st11i ('fiei v e iie1'ra.
and either 5uc<-(,1 ol" fail. 'lwv delo, iientaI piN:is+' hea1 I H 1')
willy Ihilly throulli the effort of ma in0v in,',rdiiiat,,ji i vplii'i I
and( rou)s, ib is d o10 (r)d. But -ilih cw t1u; s ,. li e 1w+ plt et.
(ided. and( iucoiunaze~t So that.l a full rII1)2v' oI opli lous tor a ,
(,111I1'on VCm be trid.
\\hile no, detailed iiilap that ]lw's ]iow to attaill :l(tei'ilt Ie >- at]
states can be develoI)ed, several police guiideliles were sugest edl
A (ilt iwioli (dl~ to I I1A1 (b, 6,t weo I)oli (V t'o (v vI,,-I w( I f I
hardships Oi a t011Vas OI))pOS(ed to a 1)('ll l:, nerit., 1)a-.
Policies to enco to b1e a cornerstone of transitional l>)licy.
The impact of )ublic )olic on values niee(lS oIxIlitil ,,l trill tii.
There is a need to think about "value il -ts"' of transfer pro-
grams just as environmental impacts are considered in other -I,
Thie Council of Econoli Advisers ought to be exp)atll,.1(l I I(, a
Council of Economic and Social Advisers.


'ile.s we can discover and apl)y i)rocesses lea(ldin to (ylal. i" 'stal il.iv, TWOS-
e-nt ecolo a.i tl, social, and 1J)sychol)gical inlialiances will (,Olltililo toi ,Iro nw 11 ii
they topple us. In brief, we must change olur Mode of ehnn, e. ]iirke's i P9 Ii i,
tllt "a nation without means of reform is without nieoin -f srvival 1' ow ,-
comes -a nation that does not continually reform its ilens osf reform ..innr
survi ve." This challenge is recognized as is aI li rent in tlie i ir: n i-. io ii v
iidivduals and institutions concerned with the devepneimit f :i,1
( ,:1 i-_-. Thris new science, frequently c dl(1 Futures Ihesareh ,r Fr, it
lpred icated on the belief that a spectrum of alternative rol l,! fu u -
a1d l lit thr imth oil oN\II efforts, we can co l rol the I)rocete-s of h 11 ,1 I -
han ie or diminish the prol)ability of occurrence of anyN Spl clie 1litur .
T!,e likelihood tlit the lovig-term (conoiN ic gro-wth of the llnitel
tves (,'C()IIiv will)r O (*Io' ()1i ltelv i C.:j
tova rs tile (litr of delbate aillonl,1 t ho,. seriousl v ('or;'erl,(e1 w itli tt(
'o,-,oU of, tihe fituire. While, lnition:l tIwstitons al tile ho t
ra !i decli ,logicll ilul~rV\tell tS ohSCl,'e ;i',inv ipsiues o t eoi r:,i+
of enervcay and ohor natitral inputs will adversely affect tie f +t ++
gi 'wt Ipotenltlil. AVIery few analysts will ar-I',e witll tie ltns. uiu
thivt 01le culrelt rate of fossil fil antIi iIi0':11 (')i sIiiui)t i continue indefinitely. Tle a ilifv of the atunlo ,pvlde t,> a hsorh wat i
a not her import nt Ciiviroliiielital coustr-int. ( owuc(t||, ie tlhvle 11t -
tions of eneratinr continued material fy'owthi will t e 1, iled. Tlis
pa!1r W disc(usses tie reasons for a slower ,1r,'e,,L:,te _"<1owt i rate u IIv
1 A I oert n I I ) 1a It Wi 0 Towa rd the Instilutionalization of hS n r .Mi ldd vr.
I'+1. Il li~thH t~l fr the Fi lI iire ,
Th~rn'iihoizt tills iler the li~li,,'l in flit' jilraz 'iu tln 1:f 1 t n l++om&l+ or "mlol+
I I I x 1 1 i
liis tr I I 1 c iO ii t ir il: t r il hr , V t T : r l s


tangentially : the case for such a prospect has been developed and
debated elsewhere. Rather, we predicate our analysis on the assuml)-
t ion of a long terxn, slow or no growth future and proceed to consider
responses to the economic prospect. In attempting to interpret the
social and economic consequences of such a slow/no growth future, a
number r of general propositions can be made.
First. the expectation of affluence or the delusion that personal dis-
income (.(III continum to increase for most people on a continuous
basis over several generations must, le replaced by a more realistic,
multi-diinensjonal notion of "complex income." Complex income en-
compasses goods such as leisure, not normally icorporated in tradi-
tional concepts of wealth and income.
Second, a substantial decrease in population size is one response that
will allow higher per capita consumption even with a given natural
endowment. But that response is highly unlikely in the several decades
Third, a slow/no growth economy may appear to be stagnant in the
aggregate but will be highly dynamic across disargregated sectors. In
fact, the microdvnamic movements can be highly disruptive and will be
a source of dislocation in a steady state economy.
Fourth. the consequences of a slow/no growth economy translate
into a need to conceptualize the social and political problems of a steady
state society. Although the issues can be stated, the solutions can be
generated only by a new public commitment grounded in a realistic
view of options that will be attainable in the future.
Fifth, the ultimate character of the steady state society will be de-
pendent primarily upon the processes by which the transition is gov-
erned or not governed. This implies that policy can significantly affect
the future. Mechanisms of public or social intervention will have to
be assessed not only by the ends to which they are directed, but also by
the means by which those ends are sought.
Given these general assumptions, this paper seeks to develop several
distinct but related perspectives. In the rest of the introduction, we
briefly examine the unique historical occurrence of affluence in Ameri-
can society in the mid-tweltieth century and discuss some of the tur-
bulent consequences of a transition to a post-affluent society. Second,
we examine some of the micro dynamics of the transition to the econ-
omy of the future by focusing on industries, firms, and households,
Third, we post the problems of a steady state society. Finally, consid-
erations of public policy are d;scused.
A. The Post Afituc7t Prospect: The End of an Era
Future historians will likly characterize the 25 years from 1945 to
1970 in American society as a period of foolish affluence fueled by bor-
rowed money. During these decades American society, after years of
deprivation during the Depression of the 19304s and 'World War I,
attempted to buty back lost time by becoming the most lavish consumer
society in history. The spending spree was financed in large measure
)y an explosion of personal credit, by federal subsidies for home owner-
nhip id highway construction. and through the floating of local and
bond issues to build the schools, sewers, hospitals, and other infrastruc-
ture for the thousands of growing suburbs. At the same time. the decol-
onization of Europe's overseas territories gave American businesses
access to the enormous reservoir of raw materials held by the under-
developed countries.

T.S. industry eI nerrd,1 lildlIiIa1e1 front World \ 'I I. and, ..,II i-
can roodss con-IIIam-+led lliili l)[i stlldar(I of liviinK I lttii ever l)ef')Ie kll(mWl. Maiy lirc'Ia-l -'( ,,l
hoiiies, secon ( (or eve I I bIr n a1.1It.: colo TV set.-. uhfI*(*(, e7,'-. ])
to Europe. etc. lBt iI tlle late '19;i)s, tIe ri.-inig 1,w! er'( Ii% v(-] d ,I
because(o fit-trs t LIe .aii. iio it! ')!itle
('etei. l'0<)l +'ict ion>ired. (+'o+I+iipiti)1i [''ee~ I(+ tile+ irlat iv'' \ at1111
o)f IT.S. gtr)p:.1
'2. (c)mlier,'; i.,, rie (',>lliletel wNi It illcreasil l,_ i Jr fo r:1VV 111:1-
terials,. hil s diiving pI'i',S 111).

1ualt itV. i:l!i ll ,r it ce-olloili,' to S>II)ly' fit(, to iisttalit Ialllk kil
Japan, \vlicli l}.hen c'oi]l import (oal fromlV est Virgiuiia aLi! iro1li
ore from Aust ralia and sli) tlie resulting steel products all over
the world. But the oil p~ro(ucing litions becm ane (OlCerleel dl)Oit
the increasingly rau pid disappear rance of their precious idi i ratl
assets. Acting jo(iitly, tle oil-Iro sharl y in or le rt o c )I-SerVe r lIIi r resources wII c increasing tl ei r
4. Since tte TI.S., alon, with liotlher oil import ing countrie-. Ia(d
operated on the .s'-umition thIat cl1I'fap oil wNoill continuee to lbe
available, the sudden rise in prices in tile fall of 1973 tlirew t1(e
whole eonolc system out of kilter. Lacking adequate su-t 4ti-
tlltes" for cliai I )et roleln, the U. ex l)erielle('e a s1<(leii e(coliitt,
jolt that ld(le it only too) apparent that the spe iding spree ,:t(i
come to an en(d.
The bill for tle t renendous splurge is now coming (dtue. aiia the rev: Tlt
is a post-atiluent society. The new (juarter-century, from 1970 to 199.5.
will be a period ill which Americanl society will be force to Jea rn to)
live with new scarcities and to acquire habits of personal anl wo(tial
Taking a broader perspective of human history, it can lbe argued
that the period around 1600 represents a major discolt init
siimificant break ill human experielnce-brousxht, a)out I le flow of
abundant energy supplies anl the development of ilacliine-. ThIle low
pace. from lulitllug an 'od gatleming to th e be(.rilnhin of a()ifl-
ture to city-building, at which humankind could wrest I!),u -v and
treasure from nature came to a close and huniankind entered a 167:Irrc
epoch of ruthless exploitation that both bettered and wtrheetl ie
human condition sitiiult aneously. The advent of tle 1)o1t-indvtrial
post-afiluent status ci(,nals the end of several hun(red .Years of 'lis-
continuity and the beginnings of the steady-state society in vhi
we return a to the slow pace aind sca rcities?"
SAn oi even i re n roCm lr 'n4iv0 i lew of itory u l'vs* t hat thhe is, t,)i vii -!tI
Sl.ownes of :t 1 evolutionIIwhen, us study of their twols re1s 1re 1' 'ri p.1 r i I
nnldeorweitt a s'iift front ri H t to left cerebratl th'mit erii +etlu ice. The hlt 1r ,o!+rIii
of the left half hrllll\ lnuode o)f Ou'erat|Oon are" io~ic:al. '.e'iueluiiil. lnwa r, ralth'nii.] ,+l .*T .r
thte right half rain's t'harut'+te'i,'s are, reatiI\,,, 1nttti~ limo a:tiv t. ,'ir~i-kt' +' le':
'lthero '} n '''1+ d' oll' t o'l a to -'u !,j'r t the -. + 'u I bit that t t utu t lllk lI u t e i'\ i
al nutulit fu-qt'' !' (ce. *1 von P-RvctiO O+'iui i' +*'ht o ut ltFrV f'+r' u 1r Se+'ntt.I ++ -.+'+:
event" X\ s41ff b''uk to ri lht iu'utuljhier!' ''utnen' e thtut tltiiut,ly will p++ it ++ l +
hrul~n' ]I o ti :l ttc]ll i lt .tI+ n' I ll Itt l iait hlllt~ Ltkttt'I I1n''b to +oiiitu'll' It o +
Il'uuI- t~t~ 't ,V i'uuVir++!uunui'lural i+]r('tuu!t iot f r |I' o:u r'lt o'1 tte ra
Ftfi Fri t I r o el f ] s ;Cl+S |V'I ll Z b + + / +" + + r, =+*


Ailuence increasingly is seen as a youthful excess. In the future
there will be a sizable number of third and fourth generation Ameri-
cans who will reinemnber affluence as a spree experienced during the
1950's and 1960's. The old saying, "from shirt sleeves to shirt sleeves
in three generations." will take on new meaning, as the grandchildren
and great grandchildren of the Europeais who flocked to the U.S.
in the late 19th century discover that they cannot "make it" in
A mnerica. The natural decline of economic ambition among thi group
and a revulsion againIst the materialism of middle-class suburbia is
evident in several different "youth movements". Though the sons
and daughters of blue collar America won't necessarily share these
reactions, a significant number of young Americans will cast a cynical
ve at the conspicuous consumption syndrome. "Post-affluent con-
sciusness" will infect large numbers of people who may pride them-
selves on "living poor with style."
As individuals reexamine their expectations, values, and goals, a
number of apparently contradictory trends will emerge. Many sectors
and occasionally the entire economy will experience spurts of growth.
Tncedae(l leisure for many segments of the population and the de-
velol)ment of new products will provide the illusion of renewed long
term growth. The grants economy will flourish. These and other trends
will -Ii)port periods of public optimism that rapid materialistic
,growth and high rates of resource consumption can resume. There
will be a temptation for public officials to exploit such hopes. But
expectations of continually rapid growth will be believed by long
term trends.
B. Social Turbulence Ahead
The decade ahead will be a time of social turbulence as post-
afilent America attempts to reconcile economic necessities with new
social demands articulated by significant numbers of Americans. The
struggle between different social and economic doctrines, beliefs, and
values will continue and accelerate. There will be the problem of
mak ing the "responsible center" of American political life more ac-
countable and effective to avoid the kind of confrontation politics
between Left and Right more commonly exhibited elsewhere.
At the same time social institutions in American society will need
to be more responsive. Social institutions, especially in education,
will seek to open themselves to market forces through the implemen-
tation of such things as performance contracting, the voucher system,
etc. In other areas, forms of the negative income tax will replace the
cumbersome welfare system. Iousinf stamps, analogoiis to food
stamps, may be instituted to qllow certain classes of people to secure
shelter at reduced prices; the housing stamps would replace federally
built housing.
There will he need for trernen(lous capit,9l investment. By 1980
there will be 55 million husband-wife households, up 10 million from
1970. The need for capital to provide infrastructure and equipment
for the new households will be met by (a) more sa\'nvsS (7) more
intensive use of technology, and (c) new, more resource conserving
,echrnolo v.
Amorican corporations will neod substanti, "Iiounfz of c9"Dihl
fo finance current replacement and expansion planI. Ad(Ution. de-

,) I

ii"atids for bm-lA)eI Iiii.k.will pniul fmuiir lite c1ukl. of llu- iiiu
leillaids of elm )st-war Iy-b(milH lhi il\+stjI )it iIt : anti-pomllilt ion
de 'i'es aiitl t i t(") (hliveld1) :-Ill)pt itlites I'' fu,->Il fuel. -w '. ii1,l:1it+
oil, energy smllrve ..\ A l~~t) laj pu lic, c')lltillllicill to) ii[pl.()'vc 1111),111

as well as l)lysical ist l ctfmvtire. It is riot li illtll iha 1 ii*< r, iiui\
plai) s \vh!y then't' Is a l ('d'( I'' l'tvlie\\+tv cmic) l -11 +ltl p,\ l )()( t *;vtI~ .

,or(r()ss ( o r, 'lailiis ilit j 'o Ill(rlivit v rt imi) t be ,tilt,1 :1lt:t11 \
raised umless it is liliktcd 1o jl)'lit(-slia'i&". I lc rited ( Oittenh ('i,, I tnnl !
studies that sliov tIiat i \-i ( peivitt (4 top e'-crIt l\ 11(I I iI
of sd lestile are oil ii mci i ve. ()1 lyv 26 pec'ciit ()f lue c(llar tie 4l )a:I*-
tieailly no wl-hite-colla r wA-m-l~irs 1-lITP ()I1 illcelli I e lplals. St di (1f ,-, 4
planlies ijtrodtcii l)rodt((it 111 o ietitive pilasi witl p)rofitla:.ril"
slhow 1productivitv ilI(1''od5seS )f 1l) to (i It lrcelit. Tits seWolJ( I 4 ,PII t
indicate + that, oie wvay to view "work desigril" reio irii is til-t it stvelIIs
froi a, technological itipelrat ive. lirms allio tlim' to lilt ru)(lu(e Vliw
technology iiiless they call deliver tile ilprovel productivityy to hetll)
pay for it.
The public and private deliand for capital ,will be intense ill tit
next decade and a half, vet the dislocatiois in stul sectors o)f tlie c((,t ) -
only will create pressures for an expansive in(inetaiy policy. (oii(r-
(x" fl10lterxe!
quently, home liortgraes may carry rates in excess of 16 p('h't
while the interest rates for personal consllilption climb eveii i ighei.
At, the same time that )roductivitv is beiiij emi!phasized, It Iil
management and unions are somewhat c11)lacehit about "jo) satis-
faction" issues. The (,tillup P'olls show that "oily" 12 percent' ()I* lite
work*11force is (issatisieI with its job contlitiois. But that 12 pelvelit
represents aIbo)t 10 ilillion workers. A sha rl er urn lersi and: iLje.. 111' (ti'
worker's cop))lex niotivational structure is iiece->ar+, not just to
insure a mininmUn level of job satisfaction aild tolerationl, but to
achieve lhigh cr levels of individal groxvtli. crea tivity, and proiliic-
tivity. A new work ethic is needed to compete with the new leisure
ethic to ilsure comp)Ietitive viaI ilitv.
Many e(,conomiic atll l)olitical aRialv:;ts \will dllv t lie iiot il)l of a )t)St -
atIlient stare ill t i reid tot, ti( i ) ost-1 it iist i-a 1 society. lhev
wvill arrRie thlat Il('Xv ter!hnolo y all(1 iiietiv(-,I' 'opr c taj)ital investineiit
vill ma,8le it possii)le to 't!t-itbilize tle (Y2"rovtl-0 t('iett'tl eP onlyV. Btt
to itnlentd tilat ,..)o\wt m'aii roo tilit' at 111 tXI)lietitial rate a;t a ileie
well lialllV soillce of elrgyv alld oilier rrvsmorcers :1ne heii ra id lI
(elpleted is phillcr a'11 exceptions faitli oil rr111 r lie ats+,,n
tioi u)on which tll( paper is lie(licatedi i'tht thle, I-ieitu1)awatv j)roj)cIIit v
of the last several tiecads AN-ill indleed (.()lie to :m ('11d. lu'll Ili'iite.
there xv will )e, :'I stl ':i6ii:l st;Ihiliz:Ai<)io of, Imate'iIl ivinl! '- f Il 1:l
ill Aleric.an ,-or soVie v :u-se it is 111li,:kl thiat p))'Vsoli:Il ild(,A)tedles's
can continue to incre:t, tit th(, rapid rate, (of tle filfties aid sxtlrs.
"r'lis l)erspectiv e. howeverr. in Iv he () rijred 1)v th(t )'ar't tlint the
e(,r)noY will still be a (dvnallini sivst cni. FIEVen :i! )otly 11 :1Y ,-tnl
-';Iif :l ter it Iu:v re:iiiel a lu-icilt of six f(eeit bumt emonti m'- to
d(evelol), s) it is with a muatiol:il (,coioilhiy. W!(i, the :itlc(ate t"rwtlI
of lile U.S. econoiiiv sliows. sta.-(miates. or t"bilizes, ter,' will still be


NN-tic c nges i weAth n income. ( rowth I and decline vill
cont 1tine t0) (WCr aWrOs-s an intr-in(lst trial matrix. Shifting growth
anl shifting deci'ine has 1111)liltions for government policy, concerns
form e(quit, and for workinjk coll(lition1s. Some tilalsitional considera-
t ions of nicro dvynallli shifts in ti economy are explored in the
next sect ion.

Tel econolly of tle I.S. is under going a metamorl)hosis from an
'adolescent econonI in which there was a long spurt of growth fed
by the fillillment of a set of rising expectations to a Illature, steady
state econoiiiv that needs to concern itself more with the maintenance
of pr oper halces2 The purpose of this section is to analyze the con-
flicts that will emerge during the transition and to discuss alternative
pol icy responses to economiC dislocations. This section explores the
Systelliatic changes in wealth, income and lifestyles that are likely to
ocur as tllie rate of econ1mc growth slows. The focus is on the
illiPacts of a moveliifnt towards a stationary state economy rather
tHuan a description. of the end result of transition.

Four c ,aracteist ics of the transitional period will need to be corner-
stones of a sat i:4aetory government policy designed to minimize the
NyelIa vc ill)acts of clianye. First, while the agIegate growth rate
will s low, there will rapid changes in the structure of the economy.
1 requently, periods of economic change are associated only with
overall growth but this need not be the case. In addition to (islocatiOns
ini secific industries, general types of structural changes discussed
below include (a) shifts from rel)lacement to naintenaneo production,
(1) geogrlaplic shifts in location of prosperity, and (c) a substitution
of lalbov intensive goods and services for energy and scarce material
inputs. This substitution will occur in both production and consump-
tion. Second(. the shifting of resources will cause economic hardships
for many ,rolups and vindfall gains for others. These gains will
cause more social discontent that would be the case if incomes were
erally"~ rising, particularly if the windfall gains are due to price
increases. ('harges of gouging will become more frequent. Therefore.
the debate over progr-l'ams to mitigate income inequality will probably
Tliili'd. tle rvsounrces I I(eCsa VV to Cllshion g 1)oups from the severe
eConomic hardships resulting from rapid structural changes will be
love (itfli(ult to attain. In an economic that is growing, the economic
p)oSitlOil of the dlisa(lvanta(ed may be improved( 1w devising a system
of transfers I hiat taxes a l)otion of the increase in 0 received
4It IS important to distinguish Letw(een two meanings of "stationary state." Ciasscail
Ofiiit' used i lie term to imply an economy with little or no aggregate growth. To
t hte (i1ic1al ecunonmists the phrase was an actual condition that was elected to occur
whe (111 t!flin: tiomi (f economic development. On the other Iand. the modern neo-classical
nimI of steadyi sta te" often refers to rtn economy in which the mathematial cond1-
tin for a coI": tan t rate of growth have been attained The term is epistemological ahstrac-
ti-in ra thor than an -inpIrIcal projection. In this palIer, of course. wC use stationir y state
in ll Isstal ,1ose. The eeonomi(- of fhe steady state have lioen described in i thoirough-
,oTilz w, by I irmian J. Daly in his "Towards a Ste(ady StatO, Econominy. M. Freeman,
S.1F. 197:.

ill CC( I'- 1 sl :T l >Ir u 11.( 1 I V ,I I ) \ I Ii I III I A li I iIi I.I I i"

II(tt'Ill I~v it 1 Is In It liuiw : f 111 e il t1t I -( M :11: L i t I -1 1
I t -,I t s I :I i/ 1 I I /I :- Iflf () 111 1f I 1f 11 (II w/ I t
f Ilil I iti lt t l o, I l 1 e wtIafI Id t Iii tr1+V 1ttt' 11i.\ tI+ t+ 1:i ii

lies. lhit& ~ol: ill11d [V Viij 1 'r .V >v 1111 v I lIv:l,(- IlL!1 I 'I I~ ~I e
]w iweithanINj)1ild l h t 111c H Itiihi :11.11 14 '. FOlelil I. I )4
TIW -e I em I :m val \ I .) III f)I Ie- ( I V 11 1 I~i -I I:I
Vi t -, li Io I1 ion Ir )I I r .( I:Iv II iit io e v I \ Ih lri I i M II N t II lit I.
e C III I Ir 1t IjTie1 l tlit'1 I I II It I I v itii<1 4 ille Itat iti, I10 l*' tix ii.

tile ~ ~ 11 :\lhl '11 ;c yie o1) 1111t 1111t ;4,s 1 01 'ci l; de en i jo dIt -p
hf i le it i I:1iit I I I w11 ohtt I ( IO(tIuil :I v II, 1Tt,:W)Q:1-e-. I 1.11

t*;Ilut th vA ~itv .vi Scv Ioh 111 n te tn l

ll l'' la t x,++l~ l I r i t 1 +,.'+t ,

fll-Ici- i i It rV 1 1 11 aI I- v w I I I fcct I ~Ie~i- I h rI e II vc t l il II()- ac m
t r I ,1 Tl(,, I_ V l' i Fti (I i+Xl Id VI t:11) QN i'Il i te 1, f l l ,, ,
C te l1- -:- ill s tII: I I i III wit:11 h ta a w I I d'l it -I ) Ic I '(.

I +.1 1 ++ +.! 1 + ,-1 ,/ ,,,,, ,7;r/ 1-:, +,], ,p,,,],
,xth (11:-I lwat I tmis I (0 v ill c,+ t i+ t [ lo a t v t I'rticc 'c tli at sc! + )I -.I, Nv -

I i- 'N i I' Il e liEv I '-- 1 I al ill ri I a I a I vI i I
I1w t ( ,It ( th- )III,' pu t ci t "t )' 1.t> l el ,ild 1 a i l'l E l I
ncS+..: (0, t 1k.1 11:1.11lt to) PI'W e' illk" ''a .

c i I I I c+1; t'] :+ \ a re: +:t ali l+ i t III m+lilt F m J*(+ : :' I +I +
t, 1- IcI Ij1 c 1-4 i 1 1, 1 + 1 1 )
I c ti, I I } + 1: : +t : t 11 1 V: I I t ( .I l I I tIIII I h e v 1,4. 1 ~I(':,'l I,. t+ ,, i l 1+ 1++ +
,.'l :t O I_'- I '*I w I I )l. I t cm t't II+ I:t le r mI N II w )t l: cI re >]< ,,+ ti :
k'~~l, W 1 'rw I I"-x ( )I l )It!0 I

()Itt C W -11 V-mti, o fl +.,Ili Ll wt+ +tl +t, w ill 1 IIIrt t(i (C: I (, t + : ill: +

)c t )it : l r It d lim )". hl~ (i.t', I v I ".I cc- '* t 1 t, ) I t l I.+':' : :I I",('
<, ~ ,, + +- : 1,+' vI + ] ,+ I 1 :111Nv, I I- i I, : t 't* t II tl I 'l t+ I I : :t ,+, I I 1
I I t If 1 i f it I v. :I (I~ t hC" Tli ll tf I It I'+~ : ttl V'+ l J), il~ a ++

.'I' I eI r s Ii P
( l Illt e 't t 1l i~ t ti11i~ t < i 11i 11<) ltt I, il' -+ it M Il 't I I O P 11t11
v I I+" I I I v


tins nay be different. Futures markets for agriculturl products do
an excellent jo) 1f smoothing out what woul otherwise be extreme
price vaIri:ti(ls between harvests, lomlever. the seasonal tluctuatioIs
Ill agricultural l)r)luct ion are regular and therefore easy to forecast.
-irice!)rivat e I)elIlator have a o it wold( be a niistake to turn
,ver ll res~onsholrtty oe "o
(TI' al Is)II iI Itv twI)r ect ing o private individuals
lweI1se we 1I-or1gaizet futures iniarket maY not exist for sonw key
~inerals. F,'ur henIore. the codition-s iie(5essar y Ir roper aimrket
response ( know ledge. ii ulepelidence of actions, and Iany buyers and
sellers) niv le abselt. Thelefore, developing IIIechanins whereby
()Vn*wVi!itt l('1i li('l1) i ple iiiarket IIi()otii out collinug price increases
in the key nineral. iei'v and (tl er 111aterial inputs either by pr1-
riing iii for nation or 1)y (irect action should continue to be of policy
seo ntd, a r category that oughlt to be ,i consideration en-
cldad sthat have iinome elastic demands-
(ledenrlald- that ilnr'sease rapidly with increases In income. As material
incomes have risen, increasing aounts of njieN were spent on goods
that are normally considered llxuries-econ(l homes, manv appli-
ance", etc. Output in these industries will either fall or rise very
Slowly as per capita real incomes level off. However, unlike the case
of scarce. resource using products. the cause of the output changes in
these industries will be due to changes in demand rather than supply.
Therefore. relative prices in those sectors producing income elastic
products may tend to fall or level off as output declines.
Wealth losses in income elastic industries are particularly likely to
result from decreases in stock market prices. Firms in industries
with both expectations of growth and characterized b limited entry
can expect to capture excess profits since new firms will not enter the'
industry as output expands. As firms or shares in firms are bought
aid sold. the future profit expectations become capitalized into the
value of the stock. When aggregrate growth slows, expectations Con-
cerninc the future profits will )e revised nd the stock price will fall.
Consequently. strenuous opposition to a policy designed to prepare for
a statioary state economy will come from firms in limited-entry,
growth-depenlent sectors.
,Third, those sectors that are dependent upon increases in population
will be -iffected as zero population growth (ZP() is attained since
thjey will not. grow a Ti)idlv as l)reviouslV. A less obvious conse-
(l1!ePce Of ZPG will be the structural change in the population's age
distribution. As the aLe structure changes toward a higher propor-
tion of older peoples shifts in demn( will occur. T!le lenmid shifts
will affect 1oth private ,,utplft and the nature of government serv-
,-(s. The..e shifts ii ame-dependent (lenland will 1)e another source of
lnaiiic cliane in the, economv.
Fourth, as the cost of material and cnertv inwlt', rie relative to
aobor cost,. a shift froi i-epla(cetneiit demand for products toward
aintenance (demand will occur, e.kz., a growth in car repair businesses.
A -hift away from throw-awavy i)rodIcts since !roducts tend to hr
ver, niaterial-enervv intensive. Vance Packard projected this in !960
in hiis book. "The Waste Makers." In addition, the proportion of
1 Vance Packard, "The Waste Makers," New York, D. McKay Co., 1960.


llewl.v )rOd il -A'aI m t I m it I item led for v-,cia .(,I Iwi t \\il I a I Iiiv ILt( 'I fl;-
slers relyv 11lm l rlp'lr-scrvic'.- to extitldi 't~ ll'' lit',. I)11r:thit,

\\0 dslilavl'il the.- t rr a ,c- jw iltl 1,X , i ,l. l ,'li1,- i l (d' il( 1tO)l l ,
I'('IV I ll

i 1 11ioi &i nal lY\\Ht ii eriiea,,llce deIui : iit ii Pi' 1 I 1ivV2X ili 1'Ci ti "

i lvat e i l a In. Ixx l .iii I ijppl -t iti t l l i lli 'a (4h i W '- l a I n*il il'ai(It
lei lP e aOt i w ,. al hti art Ii i ca.w lla'

t( ilI i ra l (' ('w. )i il' il nd T i (id lir 'iiO' a'ifI '1 w l'rI it 1 1 to \ I 1*

Ills" t11ansp-tati, 4 ) t' ,)r C,:il il ti' XXI )1 ilra ) iit ,I'' 1va 'r a'- Iii, I r
t (tt(-e freI Oliv ls: i Iiilltta'llia we'u'a'a it "are 1**1 ihv't. ~ iw- (l

)la ttit) i t x viiei i ll r e s(l ai(Xl l l., e, '.r( I(l().uL.l-'- ,,il d -

tlide ii :iii iu-ilia( w.ll1ii- exi te l le >li1)lVii '')" iii(''lidM', ail
()loisltl-lt v 1 e ai Xres-v < ?' above i' ii l li)lt> i ti'dliie 'aI" I I i) l(in I

tihe1111'siii t l eli ( 'X (elut [V. him i 'rl XIl( r (',I< o[r't- l xv iii aiio ii t -
alule, ell n l i c~ I('r-m tl 'l l ll ('P ll ~ ii e 'll~ ~ywi lll''.;,e l~

(11tll r i(ll ai iwie'i1i' ( 'It I' iera ( l(l4 l 'inus. ill ( li > :llr I (., 1()

1 'le01 i0e I'14 Of ei('1 \\llX l -g i1i1nlot II1C hIav liel.. nc i l I tlli(' 1ili t,' 4)1

(1en t'>,1 r i ce h ie'l il'ea ( t iel ea,'Oli)O i I eriiise n)t 1ii(i.' /
iiiobilitv of te'-oh1!I(4re tli' t e(iilveIiiX'e nihitel ipiilpiie-.' ihwld iinlix'ili:i't
iln (lciin)if lllahIIt'Ie-. xwiil 11 s.tllet' is.lopolo t li\-ate rewIllrt'lil!-1 11!
l'()hit liji(e (t4)ll'-( 'ail llt \\- Ilie ili 1ii rt to l l 14 Ii'xvilhi l1i1iV
w itlelv Oli n)vler:-cpl d liclUxiia lllii clie oftOilOllli*V.
Tll 1011111 ori~l !'eaccliill prilall art. [ iii

ble iall in l 11 le s v. eilfraliz t io\\ oIl en'teir thtslp1i,'w
to lal))r i(.n'tline th ) the etelit thiat I011 lei;iip Viliellt orwl i1-'Iplal Du4)iIle -to
th)1'> ale loilf'. '('NI:iiialii iiili v'. ie> xll ii olien xkiW'l'. Im i 1 ,114w

((entlYioxwex'r'. liital "'iljt i-i s fi l tii r lirm s:l Id' :At1 tliijtal'l ilil
'ii1 i"I o 1i t Iil ente 11wi \rai't inc'alil. d i teivlihe beenJ)1)J ttlci nai.
d clllt,' Ill o ler' of' i il t'i in ecllollill B cll se, ( l!1t i len list FYl

fit liei't>! (J 'mlc aut. Iiiialt n i i- V. i i ie aI'l adp i ill l ilaX lk
illdecilllllr wll lotSl~ ~ d\srop -1 m''ilt r 'dli iim 'l- i

l) Iti't r~ 1 1pr' (II t'mi rt(t'i 're s r "l'r.- i s'r V 1 r' p ti'-
! idel v i 11i,, ii, uim iii iiilt ( ecl'l m ilri wtci'. i 'i r.' cl i !5' u
t j',, t in t1w exten.: trtilt-It ljl lvi llis' i liiirll t c lll' iI I 1i S 1 'h Iii '\" i
toili deili lll J'~ li Indu -'tlo ill h'tiiin /t ;ile l -li ll ili il

I I w' vc t I t I i l t itl li5itz h n i f mis i 'idi- liii' 6 ii' ti v rl a I I I I' pyt a I
ti ,,lipll it 'w( tld ita l ti ire /| i t \! r l e I nuj w l 1r. t k i t (''r1',, 1. s''
'lyIss 'lis Tmt lt t '. ",i y sr l-; I n 1 lrac lh l' 'ti'- 1! -hi s : er a oV ile f.il
f I i ,l ilp] *mt lhl, 11 ll v t l i t~~l \I \v 'm ) 1\(d. T I t+t ,:!.
St mlllO ( 1f~ 'tt 11 i\ I t t \6 ,1 i roi bl to waiirl lk ol't~ l l -'r7r, iflr ilr o) t he,:

T ri'?i riis l 1 1 .r ti, Cll i r il tiscl tlr In r il i r i. T ITl't- t r aw
FlrTi si I l t iir, fi j' t it ak II I'. rcst cI ~III i t t lmvt r r:I-tl' l .t' Indsi o' ,
.111i()tl h e r 1 1111m t-- t~ *ll lt' i', !f < ll tl X (! I! t +Ilw l l i tly j* a l ,
lll/!l~tli~ltI I t+ tI llt l I I I / -i I / lltir I r.# -COY l 1, 1 to'!+ r ,! , i f t r,. I'' '
t ,lt':ft'.'1' \iI 1 ; d l ,n~ 1~ ix I l ir llO i t + l" r 1 ,!l !lll
Ip I~ ~!+',i Tlh ,. td it w l qi'r f' ~ r ~ f t < 111 '1; +Z I;2 1 t ',l + t t" ti! \ !1 I~i :i~ ~lt h~t I i'! :/t l *'r~ lf' f" t '-I Tl

several dea ,les( if hot a ll i + work iu ]i fe'tin of a li-pla ,re. vi ye ii an av1rae lnir ifet f fl V I" tI e tom fo le e or te -
W3)1 for nist m)llic l)oli(v. the transition nia e ler,1i'ieNd as semi-
l)',1"lP As lAule- sail 1. In the long rin we're 2ll dead." One
will detertwliille the 1.,)1 ity of a(dj lst ;uIent within an in-
(iv r is t i e at 1 1) Ilmt (of fixed n-adai)taljle invest 1unt. I Iowever, a
I.,,',,, 1. fl( I i ilexi fle Ii xeI I )vt Iit I I ( II'-s1 j l to tvl en I)I eIt impact
wii In .i+ ,{ lining Biml if th, ratio of uien to) nmahines is fixed so that
a 1:i i~-41W( W)kter W,..ill a]s( ilie fixe(i (lptal equi pn ent.
A shift ill ( vI IVIt)llIIt il II( I front repIlaceIITnt to maintenance
work aIt( tits will allec(t the skill require IelitS oI f the Nvok ,,i, force. TIie
greater the shift In skill reljiirentlt. tHlie longer xv-11 be the transi-
tional pelrio(d. Fortunately. in many' cass teI (l aIge will not necessi-
tate new skills or even lilt er-indlustry lolility of workers. For exam-
lle. conS truit on workers have skills that can be transferred to lons-
nr relmal1ilit nation. IIowever. in this example, it is unlikely that the
l munher of new construction jobs. In other cases retraining may be
sullbtantial. particularly as low skilled assenihlv line w Iowa r(Is ]iigi er skill rei ")air work.
I i fortunately, even a discussion of "'temporary (1 isplacement"' prob-
a!li ui(lerstates the difficulties of inter-industry miobility. Even in the
long run too few ad(litional firms may enter an industry. Conse-
(tlleintly, profits will rellmain permanently al)ove normal and output
vii remain 1ernanently below normal. Wl at if entry into an in-
dustry is blocked? Mtanv federal licensing and regulatory policies
tend to make entry of potential comIpetitors difficult. The tendency of
regulatory agencies to )rotect the interests of those whom they are
S+Qpposed to regulate is vell documenlte(d. If demand shifts in favor
of industries were entry is blocked, above normal profits could be
1)eri anent.' Furthernmore, nany economic activities require extremely
large capital set-up costs. While excess profits of a corner grocery are
likely to be eliininated by a competitor, a new automobile producer
will he less likely to center the industry because of the large capital in-
vest ment re u i remen ts.
I f entry is blocked th1e11 the resources in leclining sectoms will have
fewer alternatives and consequently, the adjustment process will be
more difficult. Furthermore, in this case the number of firms will be
smaller and prices will be higher than would l)e the case with free
entry. (onsequently. employment will not be as great. Finally, en-
trelreneurship yniav be scarce to such an extent that there are not
enougrh individuals able anl willing to reorganize the factors of pro-
duction1. The scarcity of entrepreneurship may, be a cause of monop-
olist ic market struct ure.,
The labor market is special since the welfare impacts of uneml)oy-
iilent are likely to be more severe than losses dIe to profits declines.
1)uring the t ansitional period many unions lind other employee
groul)S in expanding activities will seek to secure permanently gains
(if ten bookkeeping profits are regulated or limited to a fixed percentage of equity
eapitail. in such case. "profits" are converted to company related emoluments--swank
o~ics,(. costly business conventI ons, expense accounts, etc.
1. Schumpeter, "Capitalisni, Socialism and Democracy," 3rd Ed., New York, Basic

I 2'

w ill d h i f I ie v i() i tii i i ,li t 1v I Im' I (w(. tiIli l Vi a i, I rl i
\ iV'1 1o r I 10 ( li I' \m iId he (1i iilil a r lii t Il, XVi I '-, i i cw lu'

XX 'i etjl i'11r I ': t 'i 1 iiit_, : t, t lie tli i, 'i il >t'rt ''V.w l l ,+ : ,1
Nv ~~'Jilj tItftIill /It itlI- vI x'ill (fii' 1i1 c ieli
ViI':1iiiilOV', III -l w I ill.

]'jiies1 iou 81)t11 X1ti l<'t' l)X 1 I)4.'11lIit 01' wi l it, iliiit i +, I] 4i~l\, Iti In
"It he t (. If /I wer / r 1,, ,
(Ii e I, v I XX lII*i ei Ji wil OF 1141 fI \ F, Ii III :i l 1 l, )ii
1 lI )l 1 01 le'i l I I I fiX 111,11 1-n' ( I' it'

:ii'e ll Ie(f Mi I1lo'lle1 i~,ll duet' St00'1%f'5 I I 'It t1of4.ii I' lie
tIites i lia IY fm i \v I 1I)0I1 )II v XI I I Ii iii i 110 2 l' iit iI r'" ii

ii14.1 toeit 1 w ill,il X i '/i ,8V i4.'T 1)1 11>lii of te v ik >ii.Iia1,j~1
l'ItI /c l 1' II Ii'eiD I"l Xlvi

I III o l I ( I t lYtll )li' ll 11 IY18eI OI Il1 kil id, of I I',I-ai ull t.i ill ,I l~i 1

j o \) wli CXii 1 lie o1 l:1I iZ 'i 1011 ii E II I'i'' of : I II .Ilira'-
:+iiitl 111 f)l. l i l ".' 11 Xt l'Ii 'Sll f li t'1 1 f, i L' hi t liv l '.
As Zi~( is attined. t11 :ixel~l i'al C.] iii l'lie })01V IWII 1011 Xiii (Iii t'1>t
AfTu I I ISI. Ill I' ie>l of I h.it IoIiiat iIu :if ) III] iiI li it 1 1 1 !i'il
c a it ii l' 1 xvi ii 1l >e 'tilt ofil I'I ll t is iii4 I, i i' it' Ili "XX ilt
4l oI s ill : llwi O1 t)l i Ilit C"Io II "X' "ti O li 11 1' X 4 111 81
] l W I 1" 1111 ( o* N'd iil ci -s t el i lnv i ( i'f i'i Xll

I 1111 i lII) Iii I'~tt v infm. 111 _(' l 12 ; of1 Shell 8 XX Ii V 1 1)(1 % -I"X :1 I I 11
lldvl t i ll 'ii F>i' lliz ti i hi crarcl' li v i i s .I i li f t iili ()tw. l (
fo act ()n :. t I-i ;', )I )lt v etl' il r t reeit ((l tllt ) f''T ii $t>1ig'(' level ici I I' -
crealte fill l!it; (' t () ld a ce hi r,;s m he l, th ight~l~ll ( )f t ill
ol,et sec( mld, fillilio rnl la. lit,- pl":",_ ish/ ip all 1))iidl idilid wil l ie!wtta,
pillvct en e th, m "Ilz tm n e ls he p1'(i m l~ .1(t
Of(1-]m t a !m l kil () I. !1I m. lf wi ,
j01) ]w W+ l.e A ,,fi I,''(a o I (w ',, it m i 1 (tis tilh ll s ili e ,)fl (~IV",*' I !1(Y
in li ~ l II,(h t e \.I+' 4,1 "Il w m c .- In i t cclm;li i t 1(,1. th fill urt .
X ,0 ZPi() ('IIs "Iiail\d, tt(!" Ivera r age! ll t it( "oiin i l Wil -II I
ti, nthe' prlli t 1)i cwcdll-iil) o t he i Impiill:16oi T~ edi s im m t w ld
be rop rtona ly fe N.v I ne cit~.llt It I lo/:I t ;i lisl\
level l))< t~ i .....; tellipm-)lal'*v po!itim li. wvith ai hiil Illl'.i 11i]mvs' fli ill lil.l.+ )f illew emi l m e< es\t'{' ) break it Ito l tl t ;1i+1 Niv~ wIll
11(ol o bet. r i' lt' lel t!. t i .th llile tifili IllitliV vi _rtli .'' ii~~i + ,ll'
iliI(, ieit h:l!bm! l' t l fii lict del ''ile aliila w ill findl t I] I, l i iltN
! l<),w,;ed.
T hle 1)il11 li1) eft't' IllalV (l. ) 't:111 'r ili l'l c n \I i~ i pi'v:ltvol Ilii -
lbilit will del v- ,l',<(. 0,-11ii(i1 vi~l ii+ iitrl4 have*t tol m-mr,;-k it 1()l*t., he :ilw te the, ()i, l t t ilt,, I ;.

na rltti :t! i' m+llvv' P ri'll +i ithi tilt, *l! "-t,,l i \ ) .
tell i' ( i int Y m a v IcrV leo 'li;i t le t't< :I Il -.+'rl 1):i\Y +Il l+, P0 ,0 !.
A t the ilit till (dder'i 1e q 1.1 ,i \v l i w i l to ,kc 1111p)-m.ciidl++x ',
liwnlti. cm ipled', \\-ill) M *i]':+l :~ ~~' (11i yi<\:ildc '.," will c'iIlm l
0!,+'0' 1110 1 l il i'' ,01 1' l > i +~ '~ i+'it l i i, [ltlt + i t i i lt


evidhence that (current iiinlatorv retiremnent, policies operative in
t 1 organizations are not poulaOfl- aiionig eIp~loyees wi are either
retired or about to retire. Early retireiient is occurring only where
ext aordinary pension Iilenefit s have been Secured.
Several problems will a rise with in firms if verlical advancet)(ent
duie to the push-u1) anId or )ull-lp effects are (dim inislied. First, Up-
w;,, social 110)1lit' will become less likely. If expectations of the
tiralditjional version of U lvanenlient rema1in'unch1nged, then the ex-
etat ion-actual izalt iI 1) will widen. 'le ,mOseqllelces that a re-
hcedl possibility of career atlvanceeiient will have on wvork effort are
iIllcIPZlr. Will extra outplt result as individuals compete more
vi20orouslv for the few opportunities for proliotion. or will employees
feel that it simplY is not worth their effort ? Since tle response will
Va rv am1on:z euij )loveevs :1111 an ru1r firms. ,roadi(leneralizations about
the'sla are risky.'Nevertleless, a sit-tat htia number of persons may
lose interest ill cai'eer aIvancenlient.
.J(> dis-:tjsfaction ia v l)coie iv c ir'asinly c o n. Lack of up-
ward moli1itv and dereaied exl)-etatiouls of illobilitv will Cause indi-
YBi,!1:1 b in(Tasin ])" to view work as a dead enol a'tivitv. This is par-
tiV,!:lvjy likely to r,-,ult if no changess are made in the work routine
and if no additional sour'ees of W'ork related satisfaction are forth-
,o,> iir. If these conem p,-ees comIline to lower )roluctivity via
union featherbeddin. militancy. industrial sabotage, high absentee
rates. Ptc., the problems in transition will be compounded.
A third problem at the firm level involves income distribution with-
in an organization. Currently, ajre is one of the best predictors of
income e variations within an orZanization. The older an individual
is. thle bicrer hi earnings. This association results as much from
,Iltlf)lafic ] loevitv i1'reases (often called merit increases) as from
differences in talent or ability. A 3 percent annual wage increase will
resiilt in an individual with twenty-five years experience earning, more
than twice as much as a new employee if starting salaries remain con-
stanit. Although pay increases due s5olelv to longevity may be an ex-
celpfion. tiey do re, resent a trend. If longevity increases continue
to dominate va'e differentials. individuals will 1)e forced to tolerate
tie increased monotony of work that offers little promise of mobility.
\oluntary inter-firm iiol)ilitv may be greatly reduced if employers
decline to count tine wored for another establishment in determin-
in,,: paIy. Clearly. an employee will be very reluctant to take a new
jo, when it re(luires that lie start at the base pay.
A_ tronirer relationship )etween income and a~re will require that
i'e I)oult equity incornorate a life cycle concept. Theoretical dis-
,"1 ', ons reeo!nize that hiighlv skewed income distribution at a (ven
t;1( is (onsistent witl a form of equity if the cro.s-sectional maldis-
t,-ilption is pceounted for by difference in life-ciycle income. How-
(,,-,., the ~oli(- implications of life cycle-based inequality need ex-
T 1KS -1 t is nnalrOi1, ta the eeonomie ditinction between a suibstitution int nn
flro' ',, ofTeet. For e xam,,. when Federal Income Tna"e: ar lnereised tlero will be I
tr),C ,v to q)ictz te 1iiire for work since the price (opportlnitv cost( ) of lTurp will
T,,i, >,r a+'O r-*;1ti-o to mnrk'f TZods. On the, other hand. the, increnaed tai lowers rpal
if" inCr, eft w+ i+ f rth' i' +;v". th:' jn'o, o ,ffleet c, n he s'id to (onhina tif. If, however. le,
i,,+ur" n',! rhe t -,:y r will wint t work more heenlie of 10,z lower ineo'ne. In th text.
T', f 4 ',: :,. ttt!,n is 1ir,.er than the in('-- 1fTf- t

1itiinations. 10hoidd( te l' o)ibility of '.Ijoottiitg oIt lifetime
carnhligs rest sollclv wilth tlit. jitlividuiil 0' lFI(,lildt (wA11r 1('itI*ri -,e
COVI'IOlli t0 fot'e sax Il".i ,ul"s im in l huel pea'L l'1k \(""+ I' T l)1
issue is fulitdu1e1ittal to Hill sm ial se'+ritit -tiji. I ,,\\,v\ ri'. u t11

j)+o~l V wk lter 11 I .,V ,., a lie x ir i 'ol i re iirI'+ i t i'-++ \ l ,ni' I ,I 8 ,LX I i
t irill +ipleh) ) l' l m it l(i 8 lm'iieavi+,p, i Ix l :tIrI* tii- 1s'ri ;I -1 L ilI, II I(

l sci~is 1)01eV 10 -,dl+, ......el't} I:V o + l ++ li ,2e(. 'Y t 1 :i l ie-l. \+ 1+ ut on: I lt
xvlfli iiklet ,i -i., a _lt: il c III .Ve)lllil 1] l 1,,11 1 +-VI ,l x" iv-

SeI i itei rst rates t ill c IIll 1 I \tl\' IIt l1-l)O'-sil)lV li'()lilthttive.
liei l)ro\'lSiof i ,1 lleIli' ,,os If ht i eo' ts Ye t)8i oP lilt Ji l, l*
,m odl ralte levlsl at i01 tilt11 be11 1ikh';ll.li I Oltl l, t en1" \'-iI.
f lt c, aru o llos,, I .>' 'lV I I i 'e -l6j41 arc 1 X 4II I--I i 8-I *'l i 1 011 ,I' !m,
tif r e s et t' i,,,lr ,i, X l.' c (le p :11< :I i +t
Yeite inlteet ties steil ou~dabe ve&'r1H ILe ~I lettr tb
Thie p rov iist ion e td p e ubl i tOWIL fnvd s I pfll't11 I r )r( _I Y1'(0 1 ll81
11he luier rnvuatie 1 >Iithl. rite (wOIV Ibic delenarit~Nj II
lc e l- ern e level-, (AT inefli'io n ((,iII ell'mil'ae.l- + l \, tlts e o lf s'twi l .-, i i als ar' e I leicll I l>ile't w: i l ld If l+, +l + :m -
n+:lrttisc is expected evr +v year, r'da Nvagve c-al decnl', I -!, 111++1 '11 I!i,,
th+ese circlumstall'es. t endlenc+y towards inlflation imay ,, vi, rv ,

ille a}icnase *ki'! 1ilv iA-' liA a- bteeni .oi edl t I diellte $.i ll tir Ir tl ..
Il l () io tliil'itt Xill tIC Ve 8 lfol'e, dilli'uilt 1 llem 2p'eI te,'8 i ii+l, 8 m-
( 0111 f ul')ii oit \" ('iiI) l O 'es, I ix\'ersi s tlil al'e e'l'l.it lV x! Ilt'li'
I i1 I1 e fi' l\ lieecilelt about ite 1:h'k of c\+'L' : "" :1i in
l lici'cfoe the N et'tI It'f Ilitillilt)X ~io (4t lld t i il tnn ~ :1!. ,!-ll:i'
f l 11"Il1 l li e h eliIld w-il.l Ji llc> letI( m il lml i ii a'-

Ilv 19S() e'lo' lto sex'ei ill e'iI'V tell xvorkI'IIs XXill be, inl 'i,', t>+i'll-
Jlatioiis, Maii\ ee t'e un Il) whlih re 0 v1' *'Oi i V (, 'S11 111)(1011 t ii i t 1 lair~c ( eI'x I '1 1e.' t1'.
thiiiefo s g est ed tieilt if ])rdli(tiVity is l ilOle tlittid' lrt t, Vali ii) e
Se'VI 0 M 'etloS, i eli i ii tli ill 'ei 1 te llo ke will 6,i, i In j t,'V!, (.'\i -

t Iii ( illr J, ef;l M l tt l ili il llil vl.'TfI il ii lu 1. *tl v' h and are ,iT vTl '+ m ]th
I r t I-iif Jil r' t a ttl' ifr dii? Tr i s i1Tt d i ll t it Il the
Stit'f' i IIsetI r il'l!th e!l;+fl In lt +in wil| !l k clt 11

f~~~~~t~~ 1, 1+ w irti'. t+ 1i' 1 1 '+

inl the service sectors will rise to keep uj) with manufacturing, but out-
put per worker (product ivity) may not incIase.' There al, of course,
CerIIIIi liits to the rate o (iflisoMll of the service sectors. The most
imwl)Otlnlt of these are set hy )ro(dctivit within the goods-pr-oducing
st, ctor and tlw cost of capital. But (,n the other hand it should be under-
goo)d 1 11at 1,y ., ervi'es are ill fact employed in the production and
d I I io II11011Of gods.I. Tes include tertiary services (transporta-
ti() I, r c.I) and I luaterna r, services (finance. etc.). Quinary services
Slwalkl ecaIt ]ion, government, etc.) are le ssdl directly involved In
p,,, ais l i! CMi i, i alt! ea i e :' ilersi oId as rleltin 'erl ai n consum1p-
t io ll dces nmade 1)osslle by the productivity of the goods-producing
sector'. (Kurt \mo wgIis novel. Player (/PIao, portrays a hypotheti-
cal fullilre in which all g(oots are produced by one maninioth meag-
na'chine. but we are still a long way off from that kind of post-indus-
trial ht ure).
I)aniel Bel! seels.. to believe tlat the growth of the servlce economy
11Wa1- tie l cvelopnt ()f a "ew working class organized around
ilrot'essional statu and values.13 The ability to acquire and process
inforniatioi at different levels of interpersonal relations will be the key
talent ile-iiallded by this economic system. The most significant point,
hiXvevei'. i- tiat the service economy demands new kinds of interper-
sonal relationiii)S among workers, between workers and Iianagemient,
and between workers and consumers. Indeed, in the service economy,
piodltit11 and c()nlujlf)tion are uniquely tied together. Some people
will find these relationships to be a source of great tension; others will
find 6leni a s oiurce of great satisfaction. Most, if not all, workers in the
SCev'ice sector of the post-industrial workforce will find the encounters
of work to. be a learning experience. This has sharp implications for
IIIanage2',s if rey aIllow the hierarchical separation of the industrial-
desiglel orvrani/ations to continue. Managers will be cut off by their
a <,o:Im s ~1fl v itl il ~ov- of information.
Indeed, one of the growing conflicts of the next decade is likely to
>tenl froIt the l)ersirtence of hiera rclhical orgranizat ion foniiis in our
service indudtries. This industrial form of the corporation, which
seeliii- to preserve the dominant-coorinating role of a middle manage-
I t tIt tiees .ll iiiformatim. will increasingly be seen as inef-
li,.il.t. 5le tfrtelv-forniInlanaenent' teams, which share both
colnuiijication-s and authority in a somewhat circular fashion, will be
t lie l)ost-i dustrial mode of organization most often adopted by inno-
vation-o)rinted institiitioi s. But althougli 1oth economic and social
foic(.- vill )e t:'2idimg" toward this style of post -industrial orgaiza-
t io. any institit ions will resist structural change.
The p1,olt ti(' hu( Ilis far have focused upon vertical movements
willti an organization. Traditionally, individuals have placed more
1"1)1 1 et Ial than l rizoiital moveiient that.. provides op-
1)oVtlllkict fo.r new kil ds of Avork. Ilowever. opl)ortunities for lateral
t vans f'1' ma y aiso (dillinish during, transition. I'rolnotions not only
12 \ m !1 T '! 1-41. "M;] ndi of 'nhalaucd Growth: The Anatomy of Urban
(risis Amjerican Economic R{,view. June 1967.
a Daiel Bell, The Coming of the Post Industrial Society, New York, Baste Books,
1P978. Als o see the article by Peter Drucker in the Wall Street Journil (Nov. 7, 1975)
entit led "Managig the Knowledge \Worker." These new kinds of relationships will be
I racterrized by nmore and better two-way communications an(l emotional responsiveness.


c kt (I 1 h" I ic-I l w i 1t t.P 11 mli tll ,l ,is lf >l t~ l i,(1 '1i. t,( c l+ '. t ('1, 11+ Elt
let: iz )lti chl i,, -:+ T I t ff ( I w;r <1 i 1 ~ +' tll l vfi ril~ ti .-11 t,-
f I i I I I: wI lv II I .It i~ I, Wi i + I,> i~ 0 I, al : 1i 4 11 11 11 1
.. 4

Io."i l ] '+#//, 1/! ,* ,< v. w I a ,,l ,v ;it .I II'
W lI + t ':1 Ii I tii 1 t f(t i t l l t l l l+ i ( t 4 + i +! 1 \ + .
i I t

r. :il it l < I Ii< ti l l +' > Il )I II W IIII I t 11,-t #V, t i) t~ ~ l + 1tit l'i o; I tI f I '!i I II -

fi i it' 11111 v t I .,I' !' a < II l i + 'i ilF I i l le t I ll I : i l I >I I I v
fi l+t i'(1 11i d I I f I t 1-Wot'':l 11t ; il l w l t l a tt-t I I < ;+i J+ (I 11 w )a

l,;i++-Iv :I I) I :i < i t' II :1 ,' i I v Iv~ a i,,,, I I >t :l l t W D I~ t
it la t I '. l :I v I ('1 li T h ki'( 1 l I+ w wt jtlI 'I I I i t' I I I v

I f a ,I i
>('!!:l I\" ii/l I Iw i e ll ho()dl+ <}If -ill lli w r'it/ince' cwl ad- +l,(tl l' !
:l~ t/l~ lii\+ ( -1 .t~ vi>' I I I t, c I I ov:11le k oIt re:- l+ wlllll(T it o ,}-. . .d 1 lr l l i i q i ) I, I WVI lr ( wl d w;I :- i t c' l i t ol l 'l r c' N r l 'Iv 1,I fr : !l i < 'oti {
l>+'ll~~~iv i,,t'w f I+' } { l s I. It } I\+ ore 1t II c, it .' I-t' h o I t -- I + It I i I -

t l o!, I I 1 1(,i ),"Il O F' \', ,: t+ l llll lii t -l. 1'> +'' \,i .: I <
T lit "1 I l 1 i' lt T\ t' I 'll i f.. m it )atc/I i a 11, st,' \ l t I ,-.
F>l'<, I I- ,- iII Iw ot ''! l lti+ '>" i~ ti ve di .11 1',roll tI he pool/ ()f (, 11 1 w -l) I I (lll
Ii I wl+!. -' Ttltl lll ,t ( + if ", +r ',c ll w o rk.l I n ni t nv }!I l t\ -+ ,

tli >'I > + t i< 1 lit ti l+ l i{ f i I l i l' : i +,
+I r I on+t (II l ll I I I I
ll{+,.,li~ ~~~~ ~~~~ It{ !l+ I+ I V k~lt I~il". It:! I\V +t I I 1 :11+1' { 1, 1+\\ NN. I +++
111: 1o".. th ll I+ 'll I ,I* 1 U I ( 1'++.:t l t 'l i~ l l'+ l (tl ( I + t \, I I I v+ .+

tI ,+ o v I +, 1 f "t I lit! t q )I1 -. 1 t 1.+; i- :1l l 1 ....ok c F':ll 1 ..
h c tt I f i I, II '
i -~~~~~~~ ~~~~ Alt I,+{<1 I;t Ii+ -< t I~i N'-;1 w-' ,it+- I ,+1 t ,< !:i tl'>l ++i!i
lilt'lv I~ fl + I+ i I kii vl Xl~ i l~ t ('It \ I t { I1 tl I1 : if *o I f )I f

tinkeiingl eslc(iallv a!- tile nmil)er of children per family decreases
an tiel nl-lil)er of ilm lried woNmlen in tile work force increases. The
t W (,- )I IIe a in ilv will Ieconi more common, the "house)husand"
wo t ic.i pate irrei~l~i ri v in the work force vhle h is wife hohls
Iown a 1 zii-avin- jo Ie ilI re a growing sign of the times. I)ivorce
1tls and the rates of sec()nd ma rnares will increase as Voun2er
i('an1 (*'Mile to exp~e ct more from marriage and family life.
)t hle hi h rate of new fa itilV formation al1(I the costs of urlan
spiawl will make te lieedimn-density. multi- family apartment 1)Ol)U-
hir. At tihe +alme tim,, a liilil, dense conlliprehensive urban service
Corn 1l)lex. wih in.l imfll des conlinllrcial. residential. and office facilities.
,vil 1ecoiie qi t e common tlitllgolit metropolitan areas. Some of
liee olpllpexes. slicll as tle John I Tancock luilding in Chicago. will
1 i vertical. O(tlie>s will be lorizontal and extend for miles. At the
:-alll tillie, t!he 1ll1an cooperative aid co mne will be another inno-
vation in illan living, arran ienents : already it is estimated that
lilcre Ilav be ovel 3.000 U)( comnnilnles in Anerican cities. This form
of olle(.tive living nlav range from the highly informal to a highly
f, nial contl',act between professional 1)artne-s in an architectiral
or law (o-ol). Altering life styles will increasingly cause revision in
tix policy s) flat a stand 1d of equity can be maintained regar(lless
Ot 1' Iiiily V 1 eaei'I li('lits. The life tvle-tixation issue may emerge as
:+ n inl)(rtal t in mIty issue ini tle Iea r f It Ire.
hI indlividual and family y will continue to experience shifts in
l-a!ies as in fied and reconciled. A member of futurists liave commented on the
shift in values taking place in the 1)st-indu strial/i)ost-affluent society
of to(lav. Following tire typical examples of such shifts provided by
Willis Hiarman" 1
Material achievelnents, status oals. Meaing centerng around authentic
cotIU5icuous. Collsllmntit.1-l as central behavior. self-development and expres-
activities giving meaning to life. sion, deeply satisfying human r"el-
Self-discipline. al rd work. vell regu- Si)Omta ileous response to experience,
latel and rational ized emotional life. solf-expression, individual autonomy,
Primacy of econoni c values, when Coneern with beauty, sensitivity to-
these result in the domination of ward the realm of feeling and enotioiis.
man by the (lehumninizing effects of
rampant techiilogy and the deperson-
alizing consequences of large bureaue-
Restricted loyalty to ones own fai- Resp)nsibility to the total human
ily. firm, country. community.
Work-dominated life. strict seIira- Cmicern with wholene-s,. integration
tion between work and play. of work, growth. aind play.

Towamls wliat f'itu :e do these sllifts poltend ? 'Fle economy of the
fitilte will be ,!e-teim ll 1 )v tie interplav of changing val ies, re-
"''r'e avai Tal il iv, and t ec'1olov1y. T vle alie slbifts su1reSted by
SIi'ni:an are e1A illist ic silne they ari'e coml)atil)le with I a societv that
i o olmnervati e ill resoil 'ce l1s:age. IHowever. values chance slowly ani
1IVIillis I Iarman, "Contemloorary Social Forces," %tanford senarelh Institute. 197.1.

(W' I

I: is nti c'letr l. wv tItt,. t [('itll I ill bc affhe ted ) vI I ,I I i -It n(i, ht( 'i,
low\il secti01 VIIIIIC_ elil( stcadv +i:"ltale -()c'Itt V+ h'V I (,,')I.-;I lf e'xploiit I
01 1li l (s tl It a ( el Illmalit aind a r iilIt (d, I l( 11i1t il, I' Itl I V.
I I I A. T l' () lb /'/.\Ir' ,

'ile' di-lsusion of tnIfi'a ll't iou fci>ed I lli rojifi it :1 IIIll~i (9l)5s
ald between alliess t hat a re likely v ill the Ilexl t wet.. re:Yeas. It +v :"i
c Ial't('tvrized (as a )eliol of social ti i)iule it''.
+Whatr kinil of ec(,ofl(l)iI(. so)(iet V\v il (,vel i)' I I i lif f1 1 4 InatiH
l'esOtll'(+', s'ail'cit le,. slow-'oi())iie g1'cVI MD. IiWtnl st ruct 'iral tisloc':l ioh- .
o( e'xact attls "\ t r.' t o) t it(, (I I ( mi() call b~e 'I\V(,Il 1(. pl) tit Im -ln i. tlc c
(Ilfltura I to t).I ol will i ll t 'l, (', fli' i til s re o) It' ('lilL'pail) st ''tI"
>tailt' ,,-()(ie! I h)w\\'tI[, t\V() j))0ll hit li'v s iin\+( e );i t)'iii' iiit')re+-l.
Tle first, itt)el lI()>t hIttes ill(i('8slsllr st)(ti uliI-('St as i11(1ivildhita
atl groul)s ollpete \ithli iiit'r(,;tl f*(, et 1()1' ;1 l o.-[f Jiixf'(
total icOme. This ilit I) t'ailed t l ohhesiaii fut ire.c( )wncrs (11
firms in expandilgy itlustries iinay trN to p'eveit entry of new ('N'cm-
l)etitors, thus kee)inig p'i(es atl l)rolits illigl. 1'111011>- Ill expalidlii
activities will su))ort t heir fi'is int Ittlelitilljt t0 lim iit (litrIy. Rapjlid
wNI(e increis(Is ini certaini se(toi's-t(reases that wVt)ldl he tbemll>))onra
iln a collpet itive e(c'Qo)ioI1v --wvill l)ecole l)eritaml-,cnt. Few workers w\i i
he hiredl into tlie eXl)ait((li~tr areas of tle ecolll .v tthal would le tit(,
case if ilol)ilitv were t'rreater. llus emilloyees n 1fatvo'etd a't ivil,,,
will ex perlen Ce 1isil thi IICI S liat 11ia\v we ll kee) 11) wAvth ('x|l ('a-
t iolls. At the saii(t ti ite. (' i l)loyees in d(le('li 1iIil a easA will fu)n I 111t
they have been ex'ltl&hl fromt jobs ill the ex)an(li seetons5.
Ill a lemlfo('ratie stotiet v v* il lil itel Ii1 litv it (is e> t0 ('01t ,Ie We
of 1)olititS <,entel'iiy -1oi ()idt issues of income')l l dt listi'ilit .ion. I1 fraiiis
)y one gr(olup re Ilt in le climes to Otlie 's, (htaues i)1ir(esi)fly vill he(
seen ls exploitative. Th le prolpect- o a long tem'' vi period il wliwi c I t
Politics )f 4 s-elfi-.l tredistriihtuuti()1' is (lie focal point 01f soci l co flicts
is not, 1leasaIlt all(l is h'auigt with dangers of social lipiekaval.1
A It-ht )tlul um f tt(, "1(1')isis" isSll(es. su'hI as t tv a s5>,o'icate A withl
eierv, food prI'ies,, a i so 1orth. I ave caui -ed J'eat,st llardusllI)-.
11llOlg low incmer)l ps'Ol, tit(,\ ANvill continue t) have t helir fo Ii:-;-
rIul)tive effects ()n l|dle-it('coie familiess, whose (XI)ttat iois of (.)tui
staithy i're asi l'o, opelitv have beell I'tel l -;uttvl ve. lilt n1'l
t here will 1w verve little real hart lslii), tilt'rh .1 VivtiI)1io)l. wvill e-n 1e se-
'v(,''' l)>Vy(' lo( it( 1~ (iset()i fo(rt and( matl< (lt t (ei, i h)ilt'! i ll'.')n)l, fh i l Iv
lllt)Ft'(,I .,.'i,,'Q>5iet' ill eX)l'eS ,,.qI2 It, ille'e ts. l' ablilitv to (na .Se dli>-
1)'ltiol and pre-s .>iine(ssfillv (i('l ial Id- for Il()re 1Iiiatei tl'i ,:tll Ii will
1be a 1i'lt it)ll of the lepentlente f tilo' e e(etnolii V ()I1 ea'cl 21'()t p.
All :1ltt'rIti ve Illodel 110111ie ,llpliasipe Iiipmr.i for lie hliii)ir)2
iiilesty!ve (llet,-:lIrv t) lessen ilie soc.i;al tel,.ioll-.) t1 t 11112it tvh" l()p

t)I'-aisveI itletl sItI ture of wla.t 'laa'terizes e'()oliii n, V'Ilui'.' W)uIi.I he
l' i ' .\ I li'u I: 1 s ):ily l, iititit + n u v I a si-1 v1 -:4 11t r I ,

1 ;- +n \ i-, I, :il I aid I i t, -, r i i \v ,), d .) t , +l tr lu i I )i i, f o t h e
St~lll+++()ll( i" +(1{ I no+rm s tii++ ,,~ + I e+ + orf al i~ ,,i t q 4 .

ably tie two most fNI IlaIIIental' ideas in eoiomi thought. But each
i'e)pl+'ct LI a a~ a~sd ', a(lid a relat ive, as()e,(t. Ab5o1late scar(itv refers
to the s.a re it v of IY ou (es il general over a period of time. Relat ive
s I," cit y ",e ,rs to t 1I istrillt lol of sea reit I It a I)oilit iit time.
Ta ruling now to'elative an(d absolute walts, one caI do no better
SbalTl to (ilote tle defillitions riven by Keynes:
N (Iw it is t rue that I le ni o)f humn leinfis may seem to )e in-atiaille. But
they fal intlt) two classes: those heeds which are al(ute ill the ses(,e that we
feet theI vwhatev er the sit uaion oif 4our fellow human beings may be, and th)se
NN1 iIII are- rela ;I I Iille sese thaIt wve feel them only if their satisfaction lifts
us alve, lake, us feel SUprior to, our fellows. Needs of 1the second class, those
whic si isfy the desire f14r Illei()rioty. may inde d be insatiale:+ For the higher
the general level, he higher still are they. But this is not so true of the absolute
needsa lpoint may s(n be reached, much sooner perhaps than we are all of
S11 aware (if, when these needs are satisied in the sense that we prefer to devote
our fllr, her.eneries to n(OlInic purposes.
I)aly relates this distinction to economic values and the, values that
underlie much economic policy analysis:
This is a very clear and imip)rtant distinction of concepts. The importance lies
in the face that only once class of wants or needs is insatiable, namely, relative
wants. Modern economic theory treats wants in general as insatiable, and refuses
to miiake -uch distinctioms as the above in order not to introdluce value judgments
into economic theory, thereby jeopatrdizing its coveted status as a positivee"
science Even wants create(l by advertising are granted absolute status, Gal-
braith being the exception that proves the rule. By treating all wants on e-ual
foOting one i- not, of course, avoiding value judgments. Instead one is making
a particularly inept value judgment, namely that relative wants (the insatiable
needs of vanity) should be accorded equal status in economic theory with satiable
absolute wants, and that wants in general should be considered insatiable. Most
ecoomists would deny that this is a value judgment. We behave as if relative
Nvants had equal status with a)solute wants, and economic theory, it is argued,
merely describes this behavior without judging. However, always saying "is"
ever "ought" tends to be apology for the status quo. The theory by which
we try to understand our economic behavior cannot help but be an eeleent in
determining that behavior. Furthermore, this attitude simply rules out one very
imIortant class of wants., "the wants for only good wants," i.e., the ethical want.
Etli( is summarily reduced to a matter of individual taste-a value judgement
to end all others.17
In an eco-onic future.where the transcendental character of how
,oO>ls vnd .'+'vices are valed is recognized, consumption for its own
sake and!or" for conspicuolls consumption niit lose appeal. Non-
market. forms of consumption (such as leistie, frelndships. medita-
tion, and so forth) may lessen the drive to accumulate nature intensive
linds of wealth and therefore alleviate the social tensions of a lob-
Lesian future.
(1'leI IV Iti re(d ecoj w) I(' 'cI(l~Iftan(.QS Cuau le ioeh'avior. Altered
(i'. ITfsI a fl- 81( 1 SO f).lee(--t how coP1iP(i-,'s choose to behave even if the
TI)reVIos ll <,)t;()n0i were a1, 1In ava ilabl. For eixa Inule, many drivers
ii've (1mB klo( i. t Lst es sinCe the .5), mph spOeed linit was initiated.
I Nev voiifd !1ot (lriv, at the Ili rher speels even if the 65 mph linit
were reinsit ititeld. Therefore, the economic condit ions of transition will
it t e ,I es t(Iit characterize the steadyV state. In the Eunersonian
i tv'e, I aeriall wants will not be sought after so rigorously. How-

t. M. Keynes. "Economic Po;ssl iIties for Our Grandchlhdren" (1931) printed In
Essys in r ,n Norton I9M3.
: lernian E. Daly, "Steady State Economics Versus Growthmania." Policy Sciences,
V,)l. 5, 1'74t.

CO Iillost e x2l Clq V, le i A l 11 tY x I I I I I I I I I t
W0 111 ow fill l I m l L xx o Ii" iii -'') .. : 1,4 -n! \ i

111iil l' (Ii A .. to w the il 1:

tf) w hit r I t 1' I i I t 0ha1 li I I I 1 i 11 l 1 1"1 V 1u I ,i .\ I -wnI Pu.
S1" aIlS ol i ,i t'l '1 i !01 i toi a e ('i(I (1 lil i t' t ti.W,< 14 ( 1.
A 1)l(' A-, of vo i 'I o 1101 : i 1i; 1 K a i ;!11 I ii ,11W I I",

001; 111t o A ";(wO I t "I I t I I)w'IailelietYI I ( i n tl 111) 1 iiii' '1 Dv 101 n
03111: l)oxii.; lit 1i r at 1nli ll:'(nl F((1 l1e 1e 0'",ilflltit 1(ik'1 )I 1'A( 111 0l11 ite; (f I' h

'-tT tilia \ey nu- 51 1 i t\.e TV 9 00tile iuiteisix'11111lit I eI rill' & W :il1 J'r ui-x

lW i alh SiO 'll in l; w lmti l 1 ni il 04.\"ll 1 lliOK h o A i t Q (I

a il I l1 i) vI mI,'i ulow t'(mi ,i'llliJt I I ht, t K Il i t'- v on l'41i i-
t(1) I x (('(I" .% ('ti iw i i(,o l ni:i 'i no t i 'i' oI ls.'! I l 0 "WIi i 1 1 lie;

leti s e~t i', ( ile ) i t 11 \iAt i 10 or i It i ll 'liut ,ai Airol

'I'efl)i \li il 't"V'ali :1 4 iVi l nd wiP\ 'I -,lt (ms exall f( 1) t o j-, 1*

ll mitI 1l1i tiin'r w 1 t ;Se 1 fi't i 1 i" srim l '-w. i ha

io 4143" I l i Ii ''- 11, 413' 1 ~ 114i4t, Ii 411A41 I s~t s 34' *I t'\ A A< A' I 4 .' A
"I'tlood Ilf> or,: w'' 'I + l-

dit', tlI4 ii lt.. t I,, 1 4 444t'. 11 1" I, 4. :ilia{ tlt I con4ii.. (1tCtI'

f'&)ilU'o l' j"'3\1't' 44'4 N'4. or 4414.i'tt1 4' III lllb vi lln3A j', t &Ic! 14141 \ to .q i 't + n ; 4 K li.
p rhll i, >tni' 14 3 1 4'; i' 4 114411 'r W i ll i W e 4 O4 \ ; ,MI
l" nrescaM~tlichnvsh +a'tlifevis.
co lcetlrlaly of 111(101110 ill'lu ll he' ioade lledtol+I!(I+ Inc u e llo n,+ "lwh yl~ i mu++!++ f+
thex tilliiwailY li' AS p intedii' out i ear+lir +llre ll++,i+ 1e llto lient will l,....
%lo1bs, (011:110 but~ll' ai tllil+t th s il+ bl++til t 110 6 dulls! will wanlt+ 10 Work- +'lnsit -
,q) OW N K!llv! Vi lllsuiti! I tilteit~l I + M w It ll'AM ,+- Imt+ i+ 1t, m m arf I lYt


Th'Ill IVnli evcNP 1, refer t le Illl(llist senario. bult believe that given
]liiin :t a:t1 we it is iot a viable alternative.
T,(e io I :"(I (ocate. on thw otIler hand, want to avoid the
tlileii!:i i)v :lt,IiI2' tit, nlotion of what is necessary for a good life.
'ic-I t 1( oI, [tilit V ti'iniiilsljii, anl stisfying xv()rk probably um-
PHMvtJ1t t l I1)aprsuit ()t liappiils>ad do tot ne(cessarily tax the
*a rivi ri. r'a 'itv o)f nat lire. ( garbage disposal, fancy clothes, and
fast ca I.s a"( 1)oll)ly hot all that iln )orItant to Ille good life. Some
aWlv(ocates of no growth gY)o flirtlier and argue thjat even if nature and
te,110 l,3 )U ibe to prroyidle inc"a mat erial wealth, we have
L CQII Crli% I ca' *h weil tlit, levci of inconie where even miore materialist
en lea vis i-re in('onsisIcnt witi the characteristics that enhance the
nobility f t e species. As JolhI Stuart Mill stated:
I cannot regard the staltonary state of cai)ital and wealth with the unaffected
aversion so generally manifested towards it by l)olitical economists of the old
s(.lm, I am inclined to believe that it would be, on the whole, a very considera-
isle imlprovemnent on our present condition. I confess I am not charmed with the
ideal of life held out by those who think that the normal state of human beings
is I lat of strug,,1lin to get on.
Tle a..-nlition tlat as income increases,. happiness increases is
4,111 ip-licit Iea, on for concern over economic growth policy. Many no
growth .i vo.ates claini that this is not necessarily so, but base their
assertion largely on their own introspection as they drive their expen-
siv aipers into parklands inaccessil)le to the urban poor.
Easterlin has conjpiled a series of social-psychological studies on
I lie I'l;I io!i-i) l)etweeii income and in(lividuals subjective feelings of
Tmshe e nc in(licates that on a cross-sectional basis,
hflj)1)i+e-S increasess wviti income. bllt over time and across cultures
there is 7mt : significant, positive relationship between income and
lappliess. To wliat extent have growth advocates committed the fal-
lacy of k,(411l)Osition ? Ilcreas(d income may make any single individual
)ettCr otf 1l)int wv illn'rease(ld income for everybody make everybody
l)etter oi I' Evidence from ti empirical studies suggests that relative
econoinic status., or the acconplishments that are often associated with
higher incomes. may be more important needs than income.
The (exi4ene of this l'elative income bias is obvious and has been
recognized by Veblen. Keynes. and Galbraith economists, and by prac-
tically everyolie who is not an economist. E. J. Mishan put it this way :
The. "i',qtiv( income hypothesis . argues strongly against continued eco-
u m) ic riwt h. if only because it is a predicament for which the economists can
propose 11o remedy consistent with such growth. In an affluent society. people's
satisfaction, as Thorstein Veilen observed, depend not only on the innate or
~er,,ivedl utility of thM goods they luy but also on the status value of such
goouls. Thus to I person in a high consumption society, it is not only his absolute
income that counts but also his relative income, his I)osition in the structure
of in(woes. In its extreme fo-rm-and as affluence rises we draw closer to it-
,ily relative ili,,nife matters. A man would then prefer a 5 percent reduction in
his mvi ini1'm1e a 1 conl!)ani(,(l hy a 10 percent reduction in the incomes of others
to a 25 percent increase in both his income and the income of othersY2
It i- in(lee(l tlis transcenolental natitre of relative economic well-
l)Oillir wi c. l) a(ls is to concluelh that l) lblic economic policy must
Coi(,c1n itself witli the social nature of economic valie.
--R. A. Eastrin. "Does Money Buy I1appiness," Public Interest (Winter, 1973), pp.
U .T V1-hah. "4; r wth and Antigrowth What Are the Is-sues", Challenge, May-June
1 .72.

l('le iola ilitv t 1) lt i v ('111 expll, 'I' tw i, (J (,)I I M 1llbv ;

olit, wvl"It will Sllpl'lllt thll ivldlil*' w ,: lI II)(w'i1I:l1 i : 1,(1

Slow will wi e<'o1 !(uzil t(' hX wirielllee m! ioe, 't ]I 1'i i Ii, :l ,

the political. wiZ al ;tltd! )I'( iii1 el ia !m i i:- 1 1i de '" r,
steady stlte flit IIIe.
Tile l 51)Is i tiit's hiSftw i s ( l aiitl t, tlt l n Ii :u a i t -i, i 'cV.
W hile tlie' s-;'attv 't:te wvill ki cliai': tei'iized ht I irro':i-,t Ihiv' ( I
scart y of dwviltlill' Il:l ieril r, r's I~lV i ii swll 1y N II c lt 11111t. to
be al~inuiflhite. Iii af1tr. iri-e til' -liift iii vawie. and etiuilla I-u rI ,1
material co isI ra iits IiiaV loo-elb i(tiItU! I lie t'o(I itiO f,,,.! : flew
enaisafee.Aiiioiuc' t ie( (2'()d tI hat wvill liot he al"t'i d iia 1 'l
society are: creailvi! v, knowvleodhe, m(esearcMi exIfloratin, ii,.: ,1.
being, bina poteliti'l. art ist ic, exprr(s'-io. Op1po)lr unit y to 1c) *ii' Ite,
anild societal evolution. xf'flen(lit|ires o thb nai rsoIS ,'.,: ni- l i, h 11 V,
activities will lead to wore litelo ii 1 )l(. cI'e .11 i olI''i. IIt -
government, a nliore vloble Society. au1d a more effective nl -:1 1-1dx i ,,
democracy. Many aifluent and well educated people are "halilv ,wit
of the rat race tod, v ; 0o1no101ow tile steidv state Peollo'llv wil }I V'
contributed to the (eliHilation of the rat raee. The ;i't ii ,)f OIw
National endowment ,) the IIiman itle' are l)t'rl :ipk nile I) ''
what evolves public policy directs reSolrl' into IW r':1 ,f 'i l-
rural initiative.
The human lotent-ial movement will le another evolvill2' 'jt.4r,\x
sector of int jat ives of a verv personalized sort. luman P it,: :is
currently conceiv'ed, is ba.sically an interlockinlr w(1) of l ,,,, V ii
which people can grow. These include such new anid viale te.,'li:, 1t.
as biofeedack pima l therI)y. bioener2'(tics new iflvesti z.a, ii'
possibly viable teelniques. such as Kirlianl i )oto.'rl phy ai11l 1)'- ,:
and1 veryv old ways (i.e. in tle East ) such as yoga. iniedlatin,, 'ii t
(,Iiian l el(' w} lich are Iel ati l v new of. l i \,',, 'w l liv
Western iian. I Inmaut p)teutial is il embodiment of a qiiesI to e:ili(e
new diniensiolls of self and experience heretofore Inattai ti!'d iLi -
ities for living, t'x! )erieni and beljm(inlr. Tie t Ii nist 5 of t 1 :, j 1111
potential mnov(eieit aie (a) self-actualiz:t ion b ) a ItIm tt t of
conscioiisiies5 (() lit'i-l I efl(A se lse of awa 1'eness : (1) KI'c teI' Ik' t Ii
of exlpen i.. e>l e 'iallv in feel ing.: ( ) ,ea Ir lc, )n,>Iv wii (C) f
and others: anld lii niire ill touch, with oue' s self.
Another area of pesn-al and conumunitv iniitiative- wi ll te i li,
develop lment of liew famulily t vles. Snerzi'i lift 51 \,' I bat it-
,':ate e lenients of "revarlii N work.** *p*Iro(Ill' ive i\ 0M! inI:I,., : 111It-
isfvin leisure" si lI(1 h'velol). As \olt and! WilA,,t If I I dA i ii
I" IhI Sv"iietrical Va iiiil v." thI lit -' elopitieulit and i ()t ti i ii-
vidl|al life Ates witliil the eVolvin fauulily I]!it i clu:li2ipf 2
Sv Il erri st ic CI fes Ie Ie I (It I pip)ortcia siiYe~aIfi
social and econoin if pol icy. Ill llI i- vein I )uunett succi lI a kit. Is
~T'. 1hi I1), Y~olug and Peter Wllmott, "'The S mnitr',l 1' 2nl' "' 1.,, i nh I 1 ,'
and K. Paul, 1973.


ii t+ )()i it1 i t 0 Xl)et It :i il lj lt, filtilnr e lAau i (aI)tyI 'N for work vill
hec flll i1itt'auate1l wvith! lui: calpacityv fo)r l)lV-sul t.2
I t sV I I r i t i li1t t I t. is Ilot Il- 1 tn 1e)( fi ts between the
:Il t "i t' it ie I uI I wtINrk I f Nl It )i i-work act i vi ties. but1 develops
(11 111 ltry it < IN( wit of' 1(1 t t -fi ll II it 8it I and el-t pnrI) lin i al l I theC
di I'erent a.t aIvities of lif,. In sluh :i way I he lole of human life for
Iie pi iti '~ual e t omm's Ki'eat er thain tim te -ii of its separate activities.
o Iet c t1 i i oI, i I( It -t :er1st a1 i1 "! hg aiid a more
t'fk ct i Ve aci V for lea rinI )t me the result of such a I se I-erg stick
)"Ill111)tifil (If work, leisure and intimacy.
TFliis is especially ini ortant for the large url)an a reas where the
ability to appreciate and transcend cultural dhfferences between people
1)8sI- )f so (Ti t i( 1 )- .)reserving Stoti I peace. I. l syner ist ic life-
style stresses that the possibility for human growtll is greater when all
tle components of life are harmoniously developed than when one
component is emphasized over the others.
In the socially innovative society there will be the goal of expand-
ing a multiplicity of life options for different groups and in(lividuals
throughout society. The expansion of work opportunities and options
will be an important aspect in helping many more Americans achieve
a svnergistic lifestyle.
In several diverse ways value shifts will affect the quality and con-
tent of what Americans regard as the "good life." How can the induced
value shifts be expected to impact upon various areas of economic
In a society that will produce a steady amount of material goods,
fewer workers-in the traditional sense-will be required. Schumacher
has pointed out that only about 3 percent of total social time is spent
directly producing goods. Yet because this work is concentrated among
white males between 20-65. it is unsatisfying to the workers. At the
same time there are many without jobs. Alternatives to traditional
work and the work ethic will have to be found and new emphasis
given to the Quality of Life (QOL). Much of this activity will have
to be in the public service area.
Recycling, the minimization of waste, and the elimination of produc-
tion of frivolous goods could bring about a return to workmanship and
artistry. Smaller scale production units could also diminish alienation
(divorce of worker from his product) in the work place. Work could
easily be organized more humanistically, with individual workers be-
ing iore meaningfully involved in the total work process. Strangely
enoiiilh, feathorbOddi1og (in an era of a new work ethic) may also
decline as people seek new status by making meaningful contributions
atl iretin recoinitiol. TIhe "ssumption is that as a.crressive work
place competition brings fewer economic rewards, workers will dis-
place their efforts for more money with the pursuit of other work place
2 Marvin Dannatte. "Work and Nonwork in the Year 2001," Wadsworth Publishing Co.,
Belmont. Calhforn"i. 197r.B
24E. F. Schumacher, "Small Is Beautiful," Harper and Row, New York, 1973.


tp al, couple e
thorlt ,1 ( Itll A all, potililit l l ,lva.,I w ill Ilt I I lt!-1wr ,,
p'ylc d w Illl)e I ke'j) \ViII I tioni iti-e III Ia'tlei i'vi, Io II
Ila I )e ,ihl ol e:IiIeII ii XS I wI'Oi 1,t):i u '* eit- Ihin( j i xvii I v ii -

cIIiad. Status IwilI 1o, Ii Ic att:miiid I I1r,)1a}l aihiii i,'roI'-I.
I7iollcit ill.ie "A Oli iVO\V era %ilI ('0leel l' \N- Itl' I~ If I'( 2r: IutI
1)OSCS o11(s 111 1:111 l it vsielh'e with, 111rl1!. aII ey 11 o r" 1 1 1cI Iv I in n I I I
light f ete'n1l 1 (111uj( l1tw4hen, wyaihv olu vaei Jo I~'x '

opposed to goods, with tlte enil hiasis on 1".rnin n a rixviiln&. In >,mi.
being mater tN:)n leaving will cihaiacterize value 4.
In a stea(lv state, soleon e ettin,r j I(o',, nee,1 ]lot le('(a'i 1i n
that 4oneow elSe vet- le s. WhV11ile 511(11 a 1)roIo)oiti oll 1, 0.w11c for l(),
goo(s, collective consunption 1)Iovi(d( n l11('f1al1 of imjt iaat i tu, the
tra(ie-off. As stte an1(1 lo('fal goveililllent. nsts lime te (lJoiiii aniit 1t+' Ill
,gover' i int ('lt, expenllitlil '( s. tlere will bie loi'e Ct ) e el ollectIVO (10 11lll1 t I 1 II
fields of transit, !lrball r(eCreation. envilrolllleltal protect lon !nil Il!i, W
safet v. Given "I broad( concept of consinq option. thi ien bt ie a U. t.\..
niulsic, etc., also avoids the )roblel of molre for one. les.- for otI er.
since these goods are enjoye(1 by all. It nos not, however. avol,! tOle
issie of what is "better'. hnxlidiv(lnahlv (ons llne(l tioosI ht V:111 1
shared sug, ,e.t other possible ways a round the pirolflemu. Mo i'le, 1 ae fitr
p1blit lit)raties, c overninients could eXIlerinlnen vith si uar(,(1 took allil
other 1 equilm)eIit. ii'vate rental of in frequellity 1151e iienis is :lluO!.er
interestin, alternative.
TI e i'evenlle raisill CalaCitv of rvei'nnl(,nt at all levels will he ,oll-
4rained by slower (I'()VtlI. 'Manv kinds of col let i e ('( )iHI/ll I)t I )'i i111
be eiCO)rllI'aed ratliei tlnin l)'oVidv(1 directly ) I- (rove'll fliment Ne',ver-
tlieless, anlditional public "osii~ I As ell a,, piv\n l ola' t,t
roois. IN-ill ocel.' easily o11lxv if tile current lliali vale i: (M X-
('1]1csi\it-v ill (olil Il IIIptioll (lilninislies. 111llin l tl (' ate Ibilitl\ to/ti~l,
state and loal .ovel'lllients 1 will ('Olit inIIe to (lepetl Ill t 111:11 el\v41" i 'la-
tire economic values.

Siirlui'i- ingi, Iliu', ia ve heeli Vei'y f'w e1tlit'1 of t lie lilti e
()7 c p'; t i als I1 i t il t 'w I llite(l s t:ltv 1111('-c 'ils In)'IV l( tl i i,
speielllltion on tile evolutilion ofi ,apitali-nl ....~ ll its 1r ,l'vr l ,_,iN
linli S to i le ciir'lt t lai :tii;i Mil tatre. Not-\ O 'lIiV ill ii 1 it(i :i i
W illis I o:ii lua > otf)il ilat joy NvII l )o"-t1 l iii :l I: i ni i t u' c.viu'IIi(,
15111," tie >k<,letal t'( lll otf \\'iii'll I'- atle;l11\' x, ible ii1 ile ii lr4,',!i 1 0

corpo rate prormI () f sociall revponsib-ilitv. I however. it is likely
tha't wlieil t eI)pitioU of o(,ci! re I'mplhI )ilitV and profits pl)rodwes
too miuch conflict, it will not 1we profits which satVir.
Assumning that s~ ififcant clhares in vnlu(s occur, the institution of
the decentralized 11iar'ket will remain the prilarv mY I( nisin for
allocatingr resources. Of course enterI)rie will t,!ke on new forms as
cont rols are rem)ve(l in se0111 ar0us and extended in others. Indeed the
transitional phase ima.y brinl pre -sure for greaterr (1 direct controls, par-
ticullariv if shorta/os in critical areas of the economy develop unex-
pectedly or if social Iprersiurs over' distributional mount. But as
the steady state society matures. many transitional controls no longer
Will be ne,eary. Government regulation of the economy will shift
owards "inlicati-" policy. I nldeed. the prospects for direct govern-
ment intrusioni into the economy are greater in the Ilobbesian than in
the Emersonian economy.

There is a special role for education in the economy of the future.
On the way to stea(lv-state society. an information society will also
evolve. The information society will owe its existence to electronic
technology and, specifically, to the marriage between cable TV and
computers. This technology will change the times, sites, and modes of
information acquisition. entertainment, and learning. The developed
system, in the form of the "wired city" (and ultimately the "wired
world") will be used for numerous other functions, such as banking,
shopping, meter-reading, etc. The system will have subsystems, such
as RTV. which will expand customer/user options.
The primary effect of information technology will be to shift much
of the cognitive part of learning out of the schools and into automated
form for home use. Electronic publishing will also be a system capa-
bility. In keeping with the directions of the human potential move-
ment-a rapidly growing force today-the schools may betone corn-
munity centers, places to meet one's friends and socialize; they will
house growth laboratories containing biofeedback equipment and
practicum labs in the sciences; and major facility usage will be de-
voted to physical development, occupational training, social and aes-
thetic activities, and of course, specialized teaching. The new require-
ments for living effectively in a society of increased freedom, new re-
sponsibilities, new complexities and interdependencies creates the need
for the schools to develop, essentially, new people-people capable of
grasping and coping with the changes taking place; people capable of
more self government; people tuned to the future: people capable of
anticipating consequences and formulating alternatives; and people
desirous of and able to facilitate individual and societal evolution-in
short, people whose potential has expanded. These directions will be
the obligation of schooling in the future; they were always obligations,
but the schools lost sight of that fact in the deadening, estrogenic
course of their existence.
2 Willis Harman, op. cit.

IV. Pi 11' m ~ ( ~ I~1 IX\II -
A.It:o ,'h,

liy' 1l995-2000) the I St("alV al>W iv \'\ I,,lIl (-v t \ t I m
forill di i ct l y dllfirrclll: fi')ll l, tl '1110e ,]itl ta. l 1,:''a
order-o-f-za- ni d cllall!,,v G ( Il'v lilke-111:1(ril I ll ,l,' il ~ : t

tIII'o)l,_,'d1 bnowleI..e "I (i-llltl a mirinss. e'ate ;tinl (f'>i,. V ltll-
di 'll n. ll valu e o ie.allo it a litI 1 1)1!
fi lill aoll. li .. ("l pr il,)iv 1 tiv bef 1 w l-, w t )* 1,w s )'1-.

ra ciet 8, the criterion fot' l( ie I. aclt I1. sI I e. :-td (I t e t :' 1 ir in we, i i ld
t)ep nItn.' ne (l It the so011l t at i (I e:,,. I It. in I 1 ,l i l .'-

cent ,, itll) tlhe 4r1z i'j)'('[- t') 1I,!1,ia1Iijiua l'- hllK I a' 1,iu i ze,

can alway ie k1e)t, the (dvi'it of l1e ste:ldv--tel SOeieV ( atal 1}>
chla1 iill (]f tie 1 11 aOf itS ('I le-) wvihl !)VOVitl(, AlflCI'i''211 WA 1'
O)l) l lot 1lV 1) (ler'ive iic l) 11 e 1 t btiltrac ion f k $lt lif .1:, t( l 'iret
In the next decae bela v jor e,]aracteIits of 1mci)ti 1(t cll I w i,' I:I
and the Enersonian fntuves will be evident. Whator 1t11lend f vti .
VISLioI ef t}e III f UPll'. ('(V)lOlliV ('l'tP!{VS wvil I le!)elt1 to) a azr(at exte.nt
on the nature of prublic poli,y decisions t liri are WilI I) ln' V:-"
future. While a map towards a resoure-searee. 1)liSSfh ('o111) V.VIII-
not be set forth, it is evident that social S)w foi-ec< iifli U va vial M~b
will need to te incorporated into tvladiti onal eo1oi)mc poAiNy in or l
to encoura e a more satisfactory elono .ma
There should be three distinct periods of ljii l olicy rn tu t iw.
First, an articulation p!awe lurin wlich t.i ne t le 1)1eonon ic f N I I
Ni'l r',iii me- alil 1orca>Is will ie iiiide I11 (II',4't 4i\', f o, i .'er:l l !tet
IN. Illr depen t oa ti t

of political rhet ric Policy deson el.t ai-('- bd iii th.:11,
the Earth Dav. wast tefrs iel atte tto inc're, p,0u1lV c:l-
sciou-nezt of the h it its t hate Sa orTrOWt hi. I, lr'"id('llntl vtri -
maies of 1I97( exhibited the appeal of tIionae ciid ida ,te'o wi In ollo,1
some reappraisal of the dnateriali d of A punb''i'" (io'ty. po icy I nw t -
inrst of the Joint Eonomie Commit t eel on m )loyent ,1-r11I0 "111 1
planning will help to facilitate the f tler aitctiv ion o f 1ete. art
lenvs. A 'rand (l )atd organize oud rod vecnIit rI'alit T'(, :th,'t
social alternate e h must be organize d i 1ertis piti'ialit. '.)I.
second hase sho,,ld )e a mtho 'Lwifl,, ;n t I' t ffrY.IV
maris o 1 ) 71) ,hi it' th ap ea Of l:',iq 1A1 N11/<,' I l*

smet ill4'te rol :la 1liren ion of :1 -m4ai':lv >1 :Ilo m -r .icei T wl dep:ir!
upon who are the a inens and who tCot' 1,it)-Ce ii il,',t it ,1f a
prt'oeifI wihel i~~to f 'ilttif ihe nw iiiil:lt~!ioli of tite t Id)
teiwz.>111 iA i toran (lbti beore the c( irW o mi ciu4it' I o 1 *,)':I T
slow.no Lr To TpT,'!iwr e n thrIt Wtl'e next fmlf veo-N, r. will 1w

'zI~h,*: ,. tHe!Ibror, "An 1 711iry Into tho MInmin ProzspoCt," Now Y rN ra ,1;4

Ili tile tllird 1hase Aew i st it 1(M1 and reat ionshi)s of tie steady
> i, >oie! V ~ il ejIt,.v., vol've :iIII citw Ilc'rc,'d ( -1 fil. -lhs stage
nil -(ht, be t, iewd the deThe tird
Id1Y willy-illy illl th e f hi al s all c'd -
mu nit Ies. The de velo ent al 1)I l e it' Ve I C coi IIle)IlV (on-
tr(olle by overnment policy. But it can be support ed, gIIided, and
eneollI led so thIat a full ra1rie of opt iolls for a stale econonIv and
society can be tried. A policy agenda for an innovative Societv is laid
out in the following chart. The options considered by Ma(idel are
only the tip of the iceberg:

-C overnIent would create niew policy in support of science. environment, social
ina sureent, education and e1oomic policy, consistent with goals of the
new culture;
Govern meant would set new priorities to create social markets for private
busiIess operation by massive abandonment of out-dated and ineffective so-
cial welfare and indus try-subsidy programs;
-Government would initiate broad measures to achieve governance of urban
regions consistent with social and economic reality, such as a national net-
work of combined urban-observatory development banks with a Federal-
private development bank at the center, in order to analyze and finance
urban innovation;
-Government would restructure economic policy consistent with environ-
mental and policy science insight, and would remove restrictions to competi-
tion that are now widespread in law and regulation;
-Government would restructure science and education policy:
-Business would adapt market planning to study of the future and of goals of
the new culture to create new performance oriented corporate markets in
fields such as mass communications, high technology goods, and new ration-
alized services
-Business would likewise redefine balance sheet concepts of social responsi-
bility and market performance to abandon the style of "bigger and better."
engineer holistic product systems to achieve product minimization, zero
defect reliability and durability, and to create new wealth through expand-
ing o)portunities for private production of public goods, through creation-
invention of new and now unforeseen public goods, and through generating
the new "invisible" wealth of knowledge, beauty, education, travel, cultural
growth, and health improvement;
-Business would create entirely new communications and advertising philoso-
phies consistent with new marketing systems and new values;
--Business would markedly increase its investment in policy science research
to achieve a positive, anticipatory role in implementing governmental neas-
ures needed for new business markets in social goods and services:
-Business would support and help frame governmental policies allowing for
simultaneous attack by the society on all fronts-domestic, international,
space, and urban welfare-to achieve the promise of the first "post-indus-
trial" society for the good life domestically and peace and cooperation
-Bnsiness would take vigorous leadership in "applying real science to social
affairs" by rethinking its role in full support of new measuring systems for
evaluating social responsibilities of all institutions
-Communications policy and philosophy in the nation would be directed to-
ward integrating art and knowledge resources:- and
-,Edueation would beeomp a powerful new growth industry by appropriate in-
centives to bring to bear on education the multimedia resources of present
t ethnology.
Smree : Carl IT. Madden. "Clnsh of Culture : Management In An Age of Changing Values."

O~ i

1nif I t Ia i I ()11 of III*iitI(, ( ',\I I'l Ics Ii (,tI ) I I LI I t iii ii I'

Iake aolvaiiat u f. o l I))orl hui!ils IoI )adjII t I o neI w II )tiil:n ,. Ia
).)Im itive a. At tIe sNveie time ternIn'lile i)OrI':1 W I Ii,:v\
1l It1ea s to t se tax) 11 s )1 w i t t I I I I a
ictweei exje(e andl i'eaiized iIeot.
ecotmlA if t uLw sf vr are i t 1 14)1)(, tuI1),) )'8V te 1,1
insure ibihit V I.III t )o 8 ()i :I I si(,rie,>'iue oif I ra iio111 1 11 w iuv'I :
)i(8ase it wol unfair" to have a temporary wel fa'l, kv, i- 1 i
81ternatif Opportunities (id not exist. Tho imIl)Ortaneeo ,if )nl ]liiv
ip elicro thvsn ai( eononiv has been evlnIhsized. 11141 to viewu)i-
itv i peroba)y the most efiient eity mnechanism in the oi ,,.
Seot .f the( f ovrni inite Ido to encota'fe mol lit v) ),'i'
insureasm employee veliture ri4hts in uesion S and %ui),. i a ::l ,,d) .*
('oflie readily to ,wou ud. b~lenai ohal a tem p':rri wI e if',,tru e, I ,
attractive. oportn iumIpoti dy liet exist.)v,,Tlhe,,] i ol hi) fd, tm o
pr1ev'ent j overuuuueuit san,,.im) for far'o)'(, im livil!uab ot C'l,i12-l'
i)n )orthIlitcie. in their work areas.
ither (llit v issues aso must be confronted. For exaui. ]it))le. (,r: oir
I n1 IVP iviu'la- in "ert a in types of indiistries wi e i ina:ii VI ..
com1 exeric.vP to(irlease. in wealth-(ldrin transition (1o',t)',14ifl IIv
f at (ie. 'eator steps ogiht to he taken to restor trolh cl)i lwll 1).
pr ev on'luion warrants careful serutiny of the werl,- f 'i i.
If ', i l silent is theire tat previous relative eas.oie l ,) ,-,,r lii
to her aitained then a ease can be made for the ota.,te :i1 e ,t
I i indv.d r. Many government policies su(e!i at of ie lb.l- ,
,N-'11 'nti el oes are L_,'ounded in inai n n ,e raton h, 11 1 1:i ,
(-;iii1 creitri..
fll cpatoryhx steps eoleFhP, tol be take tow restore1 )t '11 )t we~t I

N'ojuw mtlr vious rel:l -it,,vir i )h'v 1(iit f o''(i omiwl i :1 r:r ')I
tIoIhI,, l il p1 i l P- 11-Own a e ea e ie and fr I ,wii i v (t
27 J'ohn P". (lir !(2hv Gapp ertiWnrner., "Iethlnk!,) Pr, h nn- :) !,c: z -pc i

:n t ,ts cn V, rG a0 1p e nd il ( e lw.) rato er 111n.,1 o1 ,it,,

'ith ornba. Sato POw otion.m i ;5


'ran u. I, u'crlilS a lk ter approach would Ie to develop policies to
(rov r 1Fco Irae a variety of V1)ptions rI iIdividlIS and not
worry :+ihoi: )oletarv equity. ()f coire, tis aIpprohh to distrihu-
i i,)11,onies wnill work only if oppotrtunities are trutely available.
I e rfore, a not ion (f rnompjlex mobilitvsocial and geographic as
well woc W oce )i 1 lbe nece+sarv.
urrentlv ninvy of those concerned with wel fare policies have sug-
*It at equalt( of resuIlts ought to replace e(luality of opportunity
:> a 1l'yK oaI.-s()ne reaolm or the shift in emphasis Is the belief
thil .tia ItIv of oplorut11111 can never be achieved. qFllal starts have
veIt II 0PrOVihetI in America. alitliouli there is clearly a trend in
i lia1 Uir I. (v; innl. Another reason for the equality of results criteria is
lthat it is tLiht to b, easier to measure than equality of opportunity.
I lo, ever, if the view that monetary income ic inferior to unnmeasur-
abM le nomnISx ine as an index of welfare, the argument for equal
l no et a 1 rv i'e-,ts loses its force.
Ie eiitv issue i< evenl further complicated, however, because luck
i1sll ali ili!>ortant determinant of wealth. Statisticins can predict
a2"r 1'eate income distril)ution with stochastic models even though
Al'1l III(1d1e do not account for inter (Yroup variations in income.
M[any. of ihe ains that occur in the future will be windfalls not only
in til h 'c!ical, economic sense that they were not necessary to induce
addit k.1a oftjI,. but also in the sense that they were unanticipated.
I Iyitv his, have crone to lengths to distinluisi bet ween the deserv-
Ini and und(lervin poor. A concept of the "deservini ricl" also
nI'l to be developed, at least theoretically. Federal income tax regu-
lat its ~aV,- made itiodcst efforts to distini:,sh between reservedd and
hh:, er+iv( eome but these steps are rudimentary.
T 'eo role of technology in the future economy will become an n-
lhlporta L, missile. Indeed alona with values and resource
avaiUblitv, technology is one of the triumvirate of critical factors
thiat, ..pe an economy. These three factors are so intertwined that
it is (ften difficult to separate them. Technology is a link between
!ciene. the economy, aI.d society. It is often the whipping boy of
(,l\*v]oniiintalists; at the same time growth a(lvocates look towards
adlvaines in teclmolov as a way of continually increasing material
wealthy in site of the limits of nature. No major techmologrical break-
tl~ro_,'hls that will chane the current prospect of limited overall
(J-,1t1 Im likely. However, because of the importance of teehinoog
n an e'o!o1mv that mlav be faced with a variety of s(arcities, it should
I ; dei ,r'av t e I ny systematicallv linked to economic policy decisions.
The Conrressionnl O01ice of Technolog Assessment can be a useful
a!'e1v for lIinking technology to economic policy. Current econometric
teclnmiue; enable researchers to simulate the impact of alternative
prodIctic-n technologies on other industries and ultimately the economy
aS a hv,-ole. Therefore. accurate estimates of future technologies can
provide (data, for economic forecasts : the earlier the technology forecast,
the fl)e h lead time if policy interventions are required. Concern
wiC, tLhe interaction between technology and economic policy should
Thuert Gang. More Equality. New York : Rlandom rouse. 1q73. qee also "The ruture
of E,.ionm :( Inoiinlity and thp planningg of Urbtn Servicez," Gary Gappert, "Journal of
f )ol. o1.
t~o : 'i ln n~i'It ofl1lnnner'," ,o! D, "\av -


dlevelop)mlent <>, fll il rr +e.lin( o ~ ( l< :illex ''! ,, ('lI ii 1''_ (*I +''V t :t Ii'
i110f r1 lllota~e ,( I I la xv eaI, i : I~ I ~I (, Itv i I4 I I -( -! : I ,,

!1e no .. i! y h + v I.l:ii l i2. e iil ,,l(1m r Cm IltI e h illd,, ( 114,) 11 L, Ifl i}'

tolo ieal ci 'aiue? (.,) V h t values will re p.(ftlilli f({Qdera level, is aan d -d :,' li>1 (i1 p A>,li, A Iw 1. !Lvt ii i: :111. I)1A 1 Iv
1arI m-in f 'ii'. I) .v,,' it I : !-\wer tle above tjillOi,1 '- a N i t- 1
p )es ective mnii tl 1 ,d: I t hx,,,ni, .

the illj<8 t that ( T;hielit (1 ei'i'1iv+ lIX\+ oi values. ),l a u i 4j' I ,i; t ,
native VUl: il! aie, Ifli. 1w v Iw!: I 1 wl) P-
1und21rtoo01. bii< ( xiIII1)e. XX,.i ,:Ic',o ev'()ll<>nliC 1) ,v ,I( .+i+ + I in -
crease output at file e'j.( iI- e the eiviron-jieuit ('dh!Yve i r, Lit ive
valiuen that are iflaeed ulOn c.lea air? In what rIi i iIn +v1,, tl. ,-:
s, nclu ? oes int1 t' ioiv r e lt i liVn froui mo etary 11 11l t I ,fIl. 1
chane the val ue 1 ]cPel in fa I I li re ,ooIS as wlvl :1 ilttII I or
1 ]ije th) e in, aet of' holai ie> ,n fv' t ure values i( I) Iorat" l I c{ ,. it
",r ill toF > f0-r h ere U i u tl r eas W)f 1 'v I, VJ' I I i 'l1.
ti (lec--iol th ot to tli:(, t 1idrou'i tloe ol v-valueloop i> i *I v v
the bU\.P ) that W.iPl deo-i 4IflPliCe lo i')IIt Values i At a"1:
nat i + al ,' )i'tl !llv lbe al p 1-t l l)V I 1N f t1, ,,
lnOVide J>ll~li'.Yv. exai;p has beeln i'e'o( iczle iii f .indina of K -
art wI ic! Ill> h 1ii -n1,)}oil e at le:,st Imortly ltaild of f e:v
value il, v lu. in a:u iieti iwil ft>i l trcro exactly l :-,z, c) -v
phlleiS of Ierfic 2 f iloi what v:1111Q8 to eI.oll1UN1 V11o, 1.ll I V t
problem 1 i, f L ,i>io, iVo e ii, will te o r e (-).r. o i+l it ilO k. 101 A ]Il, it
t'hei' d(,f socient to Biiiiii t f-ruuhthue. poiii'-vahu oi't Iw2-cI
W eti -in(, t Avl +l 1>+, lor"s ir,w i-zk re-ferre I ): Il,.cirtal ilk

that 1)olicV \X,'i l 'JO l( aini ei sir'e fr t!+' fitl :"v'. ('(,n+itdct:tiiu, tf ",alil ,}Ulir\ Ie'1h)ltK\ 1( +1 'I + ii
le ~ W~i-'1IL 11(1 :1fr:l~ei reilithi5 M l l I it

('OI1tll t 101(1l/. 1IOW)V 'UI S-llc,' ;hIIV 'oVt'IlIIiieiit :11 I)u)I WV "N'+: ,

poi 'v:~ is !n+accel ill a :i I\!,licitlv IX -- i:ii I',, { XN I 4' -e v by t I x I:
:ae o iui fl>jrtaiit i dsdiie tlolle :i,' ftoii:ilit',i :,l e ait I e- :iiial if7 h lt P 3

lp (ldit ofI ii ki:trti l i l ,th'alnl,, with li i tto e ll 4'111*1 (, v: 1( ,
tlie 1,1 (cV oial uo(it'xt caini>o be real as a a LrlVell.


( '. (/Iqll, u oi' lti /t 1(t eY /0,' / /t cr ug fl SteadMe State ASociiety
Detailed visioi.!s of the fit ire may go awry. Therefore rather than
( 01si(1eriil specifhc poliies. long terii growth imay be better directed
bv exaininu organizatioiial alternatives. "We u1,rst change our mode
of change. 2
Thle first orgaluziat iontal o!dtion is to expand the Council of Economic
Advisers to a Council of Economic aild Social Advisers. This is a more
atta Ctive o14tio tlian the prol)osal to create a separate Council of
Social Advisers. Sucl a separate Social Council is likely to reflect the
immediate interests of dominant social institutions and is unlikely to
care very miuc'h about dealing with the social ramifications of alterna-
tive economic realities. Fu rthermore. since economic issues are crucial
to social policy, it makes sense to unify these activities.
An expanded Council of Economic and Social Advisers would con-
tinue its traditional Keynesian concerns with the forecasting and func-
tions of macro economic policy. In addition it should also develop an
extensive inter-industrv /int er-re(rional input-output economic analysis
calability. Such an economic analysis unit is necessary for both the
articulation and tranitional mana gemnent phases of public policy forma-
A second new unit would be established within an expanded council
to concern itself with the development of social indicators and with
providing contracts and grants to exl)lore and support studies on the
innovative needs of a society in transition.
A second organizational option would be to develop a NASA-type
agency or some kind of Manhattan Project. This new super-agency for
the Analysis of Econoinic Futiires and Social Option (AEFSO)
would begin to perform both the hardnose economic forecasting/anal-
ysis and the creative speculation that is necessary so that the transition
can be better managed towards a steady-state that will enhance diver-
sitv and promote better social choices.
Such a super agency could incorporate:
Inter-industry/input-output analysis and forecasting.
Social indicators and social assessment.
Simulations of the ways in which a Civilian Production Board
might function especially with respect to capital allocation and
R. & D. efforts in Work Redesign with emphasis on job satis-
faction, productivity and full employment.
Exploration of new patterns of ownership and utilization of Na-
tural Resources.
A fund or a National Endowment for Social and Community
An Institute for the Analysis of Economic Inequality and Social
A third and more radical organizational option would be to house
the institutional components listed above in a new Cabinet Office of
Education and Iuman Developnent. A cabinet level Department of
Education has been predicted for some time. On the one hand such
a new department might become a Department of Education and
Albert and Donna Wilson, op. cit.

l ii ii \il i I l1(' IV 't ti i i:il, 1 -i : i 'I t1\ 111 : I i .i 1 ,

FII t (Iernio. I flIt ( (I I t ( I ;I .It I A' ( I I III I I);
V i)Vi iT I I sI ,lit l a I I 'i l i 1"lit C T it Iit twe tl lill)i T 'aI 1 ( 1 'e r ittI r -. i !,I i i I l!! 11

1I 'iui'e lliii il fui(titmiuag ili i'At-k 4,'r.t iiz 4i+ ."t l~ *..ii lliti li J +I
0f ]vlow t ile Sit i it l) il', ) li Q 1 -1 11' "ii I[ t(i ;iIli Iu I1 1) 11

W11ou it(, 1,l~ o iei Aii SJii aI1(e~lUit, 10'ait itk
t It1 I( I e (jIIeP loi I(I t li ,-Ii -It I I : i ol liiv iNlNt II011 to I1 ,r u1 11lt --

at ll uiio 'rsI i v)~lilpllel' l ,'IIIIlti~ wil l I l l t itl l, al i- altt1
Fl rtii erinore. t t eol)li)!lir t [()I 11,1 I evin
A cc lw dill,. ti) lI1 ] 'i ip lo- eIlc'iI : 11tll!
alit, \\lion l li (, istlili- at1 11 (-I t i111 i 1t),wi t o 1 tl i r,,a 118 aii(, f 8IiS Igi t! I1

Hi/er "The imit ofr aIl Refr, au

li31a reduo n rv~(s(it a do 111net 14ff h pbi e ul iyt n 110 ooi ciretl
If Ave :-l.l t hat .()rlT. Wl etw iw t l Pl t ,t ()f ioili xvo lj :111(l
e l( ':tw )io t 'iliiitiV '111d (.()Iiiliill liiltv" li'il l il-t i t ] i c l,<'lil' i 11 ,11t
in e re a e) p ro (1 to de o l iitm lit ill edlwll > flo lliii- alld~ i,,I-
i, dlosi rable 1if nt t i i it e r-I tIfve. A I )e pa tI I IIt () f EI ]lw'a i(l t to 11 :111,dlaI
Developmenolt iniglitf be thle approp')lriate ol'" il, iZ.loli lll'' ,
W ithi ic,_,i-ado", to A ltl(.ie.Will : ,( ,ie v PCOPO(] ,(, (i1" 0 4llt' n,().l tho ,jeftlersol]liIi UT0111) l o dat c| loll to) I h lliti -
l1iU1 i11 i andi~ 'il'O 1-41olk lllr t i ( -o '< l vii thell Ill(' i l l -l t,lo l)1i lw11(' 4df thO
A IIl!] x il11 ] ke\- i()1 li l. Stirred'( aillew\ hYV thle wo\'+ )!' t 'l|l iw, W hItIi ll:l1l.
t'lidt E lliel*. (0li, thlev Itl.(i e,:p;[) -illielitill7 ,,a ,inll" w iith so(.1"1] tvhl-, andl
fill'Ill.'-, ~~(1 t1a Wi't } 'il ii tl W -4)tl i I '-ticat loll to (,l f i'r t tl( Ito l('' if
deceit. Iini *1)u11lat loll i, (a it J eX I i it kIt iol I tI Ia t ha ve alw',ays p)lagliil
l Hnry Levin, N1. Carny, "The Limits of Educational Reform," Basic Books 19 75;.
BvIl education we do nlot necessarily wean the public st-h()ollng system as it calrrently


1illllllil1111111Nll 1 r1 1111111111
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