Review of the Book

Beyond Growth: The Economics of Sustainable Development
by Herman E. Daly

David Malin Roodman

[Reprinted from World Watch Magazine, September/October 1997, pp. 36-38]

The first time I encountered Herman Daly's work was part of a serendipitous chain of events of the sort that gives you pause years later with the thought of how different your life would be now if it had gone a tad differently then. Just out of college, I was spending a year at Cambridge University in England, supposedly studying mathematics. Instead, I found myself searching for distractions.

One short January day, I came across Small Is Beautiful, a 1973 work by the British economist E.F. Schumacher, on a friend's bookshelf. It fused ecology and economics in a way I had never seen, and thrilled me with the results. A conversation with another friend led to Soft Energy Paths, written around the same time by Amory Lovins, a young American physicist turned Oxford don. When that appeared, it upended the conventional wisdom that the only antidote to energy shortages was ever-more-aggressive efforts to expand supply. (Instead, it argued, countries could and should use existing supplies much more efficiently.)

On the first page of his book, Lovins yielded the lectern to an economist at Louisiana State University. This economist backed Lovins in criticizing mainstream energy analysts for viewing energy demand purely and unthinkingly as something to be accommodated, not controlled -- in effect, as an end rather than a means. "This approach is unworthy of any organism with a central nervous system, much less a cerebral cortex," Herman Daly wrote. "To those of us who also have souls it is almost incomprehensible in its inversion of ends and means."

It was a compelling quote. Daly spoke from both his mind and his heart-and thus, like Schumacher and Lovins, appealed to both my mind and my heart. His analysis was cutting, both intellectually and morally. Indeed, as I eventually came to appreciate, Daly's strength as a thinker is that his heart is in his work. Unlike the emphatically secular methods of most economists, Daly's pursuit of descriptive analytic truth does not turn him into a moral agnostic. On the contrary, it allows him to found his economics quite solidly on his faith as a Christian.

Soon, I had tracked down Daly's classic Steady-State Economics. A few pages into it, I felt I had found a new home. Where my chalk-dusted professors offered a mathematical language to describe how stars bend the space they occupy, like bowling balls on a trampoline, Daly offered an elegant framework for understanding how the human economy was distorting the natural world in which it operates. The difference was that Daly was working not at the physical but the social level of analysis, where values matter.

Beyond Growth: The Economics of Sustainable Development is his latest book. It is a wide-ranging one, constituting, if not his collected works, then perhaps his collected thoughts. Chapter topics range from population growth among the campesinos of the Ecuadorian Amazon, to the consequences of international trade, to a Christian foundation for ecological economics. Introductions for each section and for the whole volume partially, if sometimes awkwardly, fuse the material together.

Through it all, Daly never shies from calling the pitches as he sees them. He commends the statement of principles issued by the U.S. President's Council on Sustainable Development in 1995 for noting the need to incorporate environmental protection into economic policy, but takes it to task for glossing over the reality that the country's consumption of natural resources must be drastically reduced if it is to restore some kind of environmental balance. In an obituary piece, he praises his former teacher, Nicholas Georgescu-Roegen, for essentially founding ecological economics, even as he regrets discreetly that late in life the Romanian-born professor, embittered by the deafening silence with which his work was received, "even cut relations with those who most valued his contribution."

And he shies not at all from attacking central tenets of the current "Washington Consensus" that free trade and capital mobility are key to speeding healthy economic development worldwide. Transnational corporations, he says, have slipped from the reins of public control. "We can either leave transitional capital free of community constraint, or create an international government capable of controlling it, or renationalize capital and put it back under the control of the national community." (Here, a rarity: Daly oversimplifies. As tar as I know, Honda has to obey all the laws of the countries in which it operates. And Indonesian logging companies demonstrated decades ago that domestic firms can do more than their share of harm.)

Such an eclectic volume resists summarization, but one theme is clearly central, as the title suggests: the environmental and social consequences of growth. In the 1970s, the "limits to growth" debate, triggered by a book of that name, quickly polarized into two camps: roughly speaking, for and against growth. Unfortunately a basic question often got lost in the weighty attacks and counterattacks: Growth of what?

At the time, growth in the environmental demands of an economy was typically assumed to proceed in lockstep with the dollar value of what that economy produced, so distinguishing between the two may have seemed unimportant. But oil shocks and strengthened environmental laws soon gave the lie to that simple equation. Families and businesses found ways to increase efficiency of resource use and reduce pollution, or to rely more on products and services that were intrinsically light on the earth, such as software and education. As a result, the global economy grew more as measured in dollars than it did by many measures of physical impact, ranging from oil use to sulfur emissions. That suggested that to some unknown extent, economic growth might lie compatible with environmental protection after all, as long it is the right kind of economic growth.

Ironically, the title of Beyond Growth somewhat mires Daly in this well-worn and partially false debate even as he strives to move "beyond" it. The growth Daly knows we must get beyond is in the burden the global economy places on the environment and on human health. Yet most readers will not take his meaning that way upon first picking up the book; they will assume he is attacking economic growth head on.

Though Daly usually makes clear that he is not, he leaves the reader wondering whether the dangling implication is completely accidental. For instance, he rightly chides politicians in rich countries for dodging the question of how to redistribute the economic pie to combat poverty, by promising that the pie itself will grow ever bigger -- that is, for claiming that growth of the economy (in dollar terms) is the best antidote to poverty. But in the wording of his attack, he reveals what may be his true feelings about economic growth. He accuses politicians of resurrecting "the impossible goal of growth." "No doubt," he writes acerbically, "they will want to call it 'sustainable growth'!"

But sustainable economic growth is not necessarily an oxymoron, as Daly himself has emphasized for the last 20 years. In general, if governments place firm environmental protection controls (such as pollution taxes), on an economy, the potential for economic growth will then depend on the future evolution of technology and human wants. If people decide to spend much of their income on products susceptible to steady technological innovation -- say, computers rather than chamber concerts -- economic growth could continue for quite some time, since it is, fundamentally, the process of figuring out how to produce more goods and services with the same amount of work. The benefits of economic growth may be commonly overrated, especially for rich, consumerist societies where pricey sport utility vehicles jam the highways and billions of tiny model cartoon characters till children's toy boxes and dim their imaginations. Hut for what it is worth, such growth may be possible.

Of course population growth must eventually hair. Every additional person places extra demands on the planet's biota for food. Already, according to an estimate Daly cites, humanity has co-opted 40 percent of the earth's photosynthetic product for its own use, much of that for crop and livestock production -- a huge share for a single species. Even if we all become vegetarians (unlikely), human population can hardly more than double again before we will have to re-engineer every corner of the earth for agriculture.

Daly is completely on-target when he shirts from asking the empirical questions about whether and how economies can grow, and starts raising the moral questions about growth and the environment. He dares to ask, Why does the environment matter? Why is air pollution bad and rainforest preservation good? The answer he often hears is that we must protect the environment "for the sake of our children." But that does not satisfy him, for it only begs the question of why future generations matter -- an impossible one to answer through logic alone.

Daly gently criticizes his non-religious, "materialist" colleagues for sidestepping the question. "There is something fundamentally silly about biologists teaching on Monday, Wednesday, and Friday that everything, including our sense of value and reason, is a mechanical product of genetic chance and environmental necessity, with no purpose whatsoever, and then on Tuesday and Thursday trying to convince the public that they should love some accidental piece of this meaningless puzzle enough to tight and sacrifice to save it." I realized as I read this indictment that it could apply to me as well.

To give environmental economics a firmer ethical grounding, Daly proposes a "biblical economic principle" that has as corollaries both the rightness of environmental sustainability and the need for a ceiling on economic inequality in a society. As one who was not raised in any organized, religion, I cannot follow Daly down this particular path. Yet even if I could, it might not help. Just as there are many materialists who are environmentalists, there are many Christians who are not. Evidently belonging to an organized religion does not ease the task of formulating values. Interestingly, Daly himself does not so much derive his ethical principle from biblical teachings as he does adduce it as a sort of eleventh commandment. Even a Christian reader must rake it on faith.

Nevertheless Daly has confronted me with the reality that I, like anyone who speaks out on the issues of our day, am a preacher -- or maybe a minister. No amount of reasoning can justify my environmentalism. The force of logic can test values for consistency with each other, but it cannot produce the values themselves. Rather, values must develop from somewhere within us. Thus before environmentalists can persuade people to follow their reasoning, we must first work to spread the values on which that reasoning is based, or to convince our audience, as preachers often do, that it already shares those values. What makes Herman Daly a standout among environmental evangelists is that he is perceptive enough to see himself as such.