Infinite economic growth is not possible on a planet of finite resources. It’s an irrefutable fact, yet it’s one that has yet to shake the foundations of mainstream economics, government policy, or business strategy. Since the Club of Rome's landmark 1972 report, Limits to Growth, and its 50th anniversary follow-up, Earth for All: A Survival Guide for Humanity, the warnings about the dangers of unchecked growth have grown louder, but their reception remains muted. Little progress has been made in challenging the dogma of infinite growth.
Even as the United Nations and other global institutions recognise the urgency of ecological crises, frameworks like the 2015 Sustainable Development Goals still pursue growth as a central objective. Simialrly, the Circular Economy movement, despite its merits, acknowledges the need to decouple growth from resource consumption but stop short of questioning the growth paradigm itself.
In contrast, the concept of the Steady State Economy (SSE), championed by the late economist Herman Daly, offers a bold and necessary alternative. Unlike more ambiguous models like the Wellbeing or Doughnut Economies, the SSE explicitly envisions an economy that prioritises stability over endless expansion. It is an economy that thrives on renewable energy, operates within ecological limits, and promotes qualitative development rather than quantitative growth. It offers a more refined view of where both local and global economies need to aim.
The need for this shift is increasingly apparent. Yet, implementing a steady state economy raises profound and often overlooked questions about how we work, live, and organise society. Exploring these challenges needs to be more than just a theoretical exercise; rather it's essential for our planet's future.
The concept of a steady state is more commonly related to manufacturing, where there is a steady stream of energy, along with other inputs, that drive a series of processes resulting in the production of heat and outputs. A simple example of a steady state system is an ecosystem, such as a region of forest or grassland, that remains more or less constant over hundreds or thousands of years. Light energy enables carbon dioxide and water to sustain a whole series of life producing processes which, in turn, produce heat, carbon dioxide and water. During that time, many other elements cycle through the system.
It follows then, that the defining features of a Steady State Economy (SSE) would include reliance on renewable energy sources, a stable and sustainable population, the use of renewable resources at a rate that allows for natural replenishment, and the consumption of non-renewable resources (such as metals) only at a rate that supports effective recycling.
This means a SSE is not to be measured in terms of Gross Domestic Product. Moreover, such parameters do not require a return to preindustrial-era lifestyle. Herman Daly notes that a SSE is one that develops qualitatively (by improvements in science, technology and ethics), without growing quantitatively in physical dimensions. He also recognises that it is the rich, developed countries that must adjust first of all to a non-growing economy, with eventual uptake from those that are less developed.
'The case for a steady state economy is compelling, and its adoption seems inevitable. The challenge lies in determining how we get there and the level of responsibility our generation has to lead the way.'
Already, there are encouraging signs we are moving in the right direction. Initiatives like recycling bins with colour-coded lids have transformed waste management into resource recovery systems. The global population is expected to peak later this century, and the right to repair movement is gathering strength. With the continued rise of decarbonisation, the decline of fossil fuels is now unstoppable, leaving the world to wonder how much time the fossil fuel era has left. The strength of the environment movement is also growing as efforts to save forests, preserve biodiversity, and upgrade the Environment and Biodiversity Protection Act increase. The current Federal Government is launching an inquiry into the advantages that can come from the Circular Economy. Even within the Church, more individuals, parishes and schools are registering their commitment to the Laudato Si Action Platform.
However, several critical aspects of the transition to a steady state economy often go unexamined, raising pressing questions about its broader implications. For instance, how might investment patterns shift in an economy that prioritises sustainability over growth? If durable, fully recyclable products become the norm, and industries like mining and construction scale back to focus primarily on maintenance, what will be the impact on employment? Furthermore, as automation, artificial intelligence, and robotics continue to streamline processes, reducing the demand for human labour, how will job markets and income distribution adapt? Will shorter working hours lead to reduced incomes, and how might that affect systems like superannuation and social security? Can policymakers navigate these changes without triggering a recession — or worse, a depression? Additionally, there are complex challenges for sectors like international trade and tourism, particularly in communities that rely heavily on these industries. Adapting to a steady state economy requires addressing these questions head-on, developing strategies to balance economic stability with environmental sustainability while ensuring social equity in the process.
The need for a new model of economy has not escaped the attention of Pope Francis who has called for an economy inspired by St Francis of Assisi, one of peace and friendship with the earth. While promoting the ‘Economy of Francesco’, he says it is a question of transforming an economy that kills into an economy of life. Recognition of this need has led the NSW chapter of the Centre for the Advancement of the Steady State Economy (CASSE NSW), to create an online petition, asking the federal government for an inquiry into the safe transition from an endless growth economy to a steady state economy.
The case for a steady state economy is compelling, and its adoption seems inevitable. The challenge lies in determining how we get there and the level of responsibility our generation has to lead the way.
Phil Jones is secretary/treasurer of the Centre for the Advancement of the Steady State Economy (NSW chapter)
Main image: Chris Johnston illustration