Customer Reviews

Beyond Growth: The Economics of Sustainable Development

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Herman Daly has been warning his readers of the dangers of unrestrained growth longer than some of them have been alive! He is a tireless, thoughtful, and informed proponent of sustainable economic policy who has enjoyed more success than most growth heretics, as attested by his six years at the World Bank. But, like other heretics - whether of growth or of other dogmas - his teachings are largely ignored or ridiculed by the pharisees of proper thought. No doubt his professional status has been diminished by the stand he has taken. Felicitously, we don't burn heretics at the stake these days for undermining archaic beliefs purblindly held or the anti-growth movement might have its first martyr.

In "Beyond Growth" Daly puts forth his beliefs in a concise and readable way. I found the first few chapters a bit heavy on economic theory and terminology (Daly is after all an economist first and foremost), but once that necessary underpinning has been laid Daly goes on to discuss growth-related topics (population, international trade, ethics) in terms more familiar to the layman, expressed in a thought-provoking and even moving way. Daly not only knows, he cares. The final chapter of the book, in which he attempts to meld the concept of stewardship common to most religions with principles of sustainable development, suggests Daly's concern for growth-addicted humanity springs from a religious upbringing. If he has forsaken some of the dogmatic teachings of his youth, he has retained the kernel of the faith, a devotion to Truth and the well-being of his fellow man, to which he adheres as firmly as did his Renaissance predecessor in heresy. Such adhesion brought Bruno martyrdom at the stake; for Daly it is more likley to bring ultimate recognition as one of the most forward-thinking intellectuals of his time.

Daly, more than any other economist or writer on sustainability, makes clear the fallacies of traditional free-market thinking. The book illustrates very clearly why economic growth cannot be sustainable in a finite world. (Although he doesnt use the metaphor -- I'll borrow it from Edward Abbey -- the same logic explains why "sustainable" cell growth in humans is called "cancer.") Daly argues that traditional economic theory is mainly useful in only one of the three core areas of economy (the optimal price and allocation of scarce resources) and does not address in any meaningful way two other issues -- the distribution of resources and determining the overall scale of the economy that can be sustained within the biosphere. Particularly interesting is the essay on economist Nicholas Georgescu-Roegen, which describes all of the tenets of traditional economic theory that become untenable merely when one accepts the fact that the second law of thermodynamics (the law on increasing entropy) must apply to an economy just as it applies to the biological and physical world.

What makes Daly effective as a writer is the calm humility of his intellect. Economics has practically become a religion in our society (witness the dogmatic reviews of political/economic books on this site). However, unlike other economists, who get shrill and polemical when their dogma is challenged, Daly is willing to consider possible holes in his arguments, opponents' counterarguments, and unknowns. Of course, he shreds most counterarguments in his calm, polite way, but after reading other economists the openness is refreshing.

My one complaint is the disjointed nature of the book. Although certain themes run throughout each of the seven sections, some of the pieces were originally written as separate essays, and it shows. However, given the clarity of the writing (even on very technical subjects such as Soddy's views on the nature of money) that is ultimately forgivable.

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

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

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

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

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

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

Herman Daly fills a spiritual void in the field of economics. He explains how current capitalist economic theories dependent on unlimited growth are not only destructive to the environmental resource base upon which the economy depends, but also morally indifferent to unwanted side effects such as the unequal distribution of wealth. The strength of Daly's work is such that it may help bring two important advocacy groups that are not normally associated we each other--environmentalists and Christians--together into a powerful constituency.

Herman Daly continues to consolidate and sharpen the insights first expressed (with coauthor Cobb) in "For the Common Good." Here, with 6 years of experience with the World Bank under his belt, Daly is uniquely able to address the short-sightedness of current economic thought and flesh out its implications for all of us. Although quite technical for the average reader, this book says all that you would ever need to know about why the IMF, the WTO, and the World Bank are rapidly pushing the "inevitable" global economy and all of humanity toward an even more inevitable ecological meltdown. But more importantly, Daly calmly details the exact policy changes that will be required to reverse course. They're not complex -- they simply require a level of political will and cultural sobriety not seen in the United States since...well, since the country was founded. From my perspective, this book is a _must_read_, even more so than the equally outstanding "For the Common Good."

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

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

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

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

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

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

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

Daly comments in his chapter on Georgescu-Roegen that the grandmaster of physics-based economics was his professor at Vanderbilt. I recall reading in one source about the importance of his time in Brazil for his developing insights. This book contains one chapter on Brazil, where Daly reflects on some aspects of population growth and the economy there.
I read this book in a grad school course, having an undergraduate degree in biology, much practical activism, and some minor graduate background in some economics. I needed to outline some chapters to really grasp his discussion and terms. As Jared Diamond mentions in his book Collapse, the removal of any tree, fish, or living thing inherently disrupts ecosystems. While I have found organic foods and green products to be fundamental to creating a sounder activist lifestyle, and perhaps there is some part of me that bridles at the role of economics in subjugating ecosystems. Of course, Daly is a valiant intellect in service of aligning nature and human economics, and I am glad to find it is essential and rewarding to grasp his terms and reasoning.
His chapter 1 on moving to a steady state economy provides two fundamental ideas, biophysical and ethicosocial limits, along with the contemporary psychosocial condition of money, indicators, and information technology. His Chapter 11 I found especially helpful in focussing on the other basic concepts of allocation, distribution, and optimal scale.
A funny characteristic of Daly's thought strikes me as strangely comparable to conventional economists, in that it is overwhelmingly philosophical in character. While he also overwhelmingly appears to be applying a very tangible awareness of the biophysical and ethicosocial limits to his thoughts about allocation, distribution, and scale and the like, he does not cite constructive and existing examples.
As he refers at the end of his biophysical topic, conventional economists are like high priests. I think he implicitly perceives another issue that I don't think he explicitly addresses, that of economic power. William Dugger and a few other hearty economists have braved the subject, although it is C.W. Mills who had forged through some wilderness with his work, The Power Elite. Therefore, Daly may want to remain in the highly theoretical realm to avoid imaginable tragedies of other sorts.
Nevertheless, he does refer to Greenpeace in the introduction in an offhand reference, which touches on this important invisible, and essential, dimension. While Daly's discussion explores brilliantly various essential conceptual realms, I think three additional ones that help me grasp and stick with his enormous accomplishment are the views of Ralph Nader, Anita Roddick, and James Warbasse. I use Ralph Nader to reflect the role of non-profit activists like Greenpeace, Friends of the Earth, and Sierra Club. Anita Roddick represents social entrepreneurs like Pax World Fund, Tom's of Maine, and Patagonia's founder. James Warbasse advocated for the cooperative movement, represented in part by Welch's, Ocean Spray, and Land O'Lakes, but more strongly by Organic Valley, Equal Exchange, and Once Again Nut Butters.
With these types of dynamics in mind, an invisible wall in Daly's thought becomes clear. His focus has continued to be the established system and the fundamental dynamics underlying its tragic growth. Ultimately, however, the hope for manifesting his insights lies outside the realm of his overall focus. The wisdom economy he refers to briefly exists in many places already. Daly's discussions are a fine basis to encourage and motivate those who already participate in the alternative, green economy.
Moreover, I have found at least two points which reflect something about the limitations of Daly's own assumptions and focus, trivial as they ultimately appear to be. His review of the situation in Northeast Brazil tragically fails to acknowledge the indigenous populations. He makes an egregiously wrong statement "there is no ethnic difference between the poor and the rich." Personally, I happen to have close family in that very area, and immediately perceived the mistake. Further research clarified the situation for me. A tragic case of cultural eradication took place there, which may have spared some lives but meant total cultural subjugation.
Secondly, he states at one point that he would let labor and capital duke it out as if on equal terms when he concludes an argument of biophysical limits. I thought that an unrealistic equation, and a moment of loss of clarity as he circled in the intellectual stratosphere. Unfortunately, for all the corporate executive and cultural prejudice against laborers, it is the anti-employee actions of cold-blooded, profit-blood thirsty executives that has overwhelmingly debased labor's conditions and underlain most of their grievances.
On a number of occasions he seems to indulge in conventional market assumptions before mostly discerning fundamental issues. The issue of labor ultimately has been given extensive treatment in literature on employee-owned firms, beginning with Jaroslav Vanek and others in journals like Journal of Economic Issues. David Ellerman has made an important argument recently, and well-described in William Greider's The Soul of Capitalism and Mark Lutz's Economics for the Common Good. Daly is also treated in both those excellent works. Greider's addresses many practical dimensions and cases and would make excellent accompaniment to Daly's work. Michael Conroy's work, Branded!, also. He treats the non-profit certification movement with some inspiring detail.
Ultimately, my research has been leading me to the conclusion that the empirical basis of modern economics is not their inexplicable powers of fantastic logic. It is the missing dimension captured in Daly's quote of high priests, Mills' work on The Power Elite, and Dugger's work on Corporate Hegemony. Predatory, profit-maximizing corporations have stacked the system, including legal decisions over the last 200 years in an anti-democratic counter-revolution even before Reagan. They created a limited liability culture that has created an advertising and consumer culture each in turn. Thom Hartmann, Joel Bakan, Charles Derber, and Marjorie Kelly are among some of the excellent researchers on those topics, along with Greider, Dugger, and Mills. Therefore, the strongest logical step for these brave ecological economists like Daly, and any of us there supporters, is to link the actions mentioned by Diamond, formerly of the WWF, about the need for citizen action and the successes of the WWF and Rainforest Action Network. Keeping Nader, Greenpeace, Roddick, Warbasse, and Conroy in mind, and the many civil society groups, Daly's work can find the empirical base it needs to help transform academia and green industrial society.

I read this book in 2009! This book is very useful even if it was written 10 years ago.

This is not always easy to grasp and understand all info, but it gives pertinent point of views especially during the current financial crisis. Mr. Daly is a pioneer and a genius!

I highly recommend this book if you would like to understand the current financial and economic crisis or if you want to discover a different path than the Economical growth.