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Growth vs Development

Herman Daly, interviewed by Bruce Kunkel:

* You make a basic distinction between growth and development. Could you elaborate on that?

Growth is a physical concept. When something grows, it gets bigger, either by assimilation or accretion.

Development is a qualitative concept: something gets better, it doesn’t necessarily get bigger. It evolves, it changes, it improves. As analogies: a snowball rolling down a mountain is pure growth, by accretion—it’s getting bigger and bigger. An embryo is growing and developing at the same time, changing qualitatively as it gets bigger. Planet Earth as a whole is not growing, but it is evolving, either in a positive or a negative way. One problem with gdp as a measure is that it conflates these two very different processes.

* What might be a measure of development, once biophysical growth had stopped? A way of measuring development in terms of increased complexity, or something like that?

That’s a hard thing to do, but it’s an important issue. Almost by definition, quality is fundamentally unmeasurable, but we do know that some things are better than others. Complexity could be a part of it. On the other hand, simplicity could be a qualitative improvement. I don’t really have a good answer to that problem yet. For now, to my mind, the important thing is to force our attention onto the qualitative dimension by limiting quantitative expansion.

If we imagine a steady-state economy that’s constant in terms of its physical inputs and outputs, we could envisage that some economic growth might take place in terms of increased efficiency—the same amount of steel could be used to produce more cars, homes could be heated to the same temperature using less electricity, and so forth. But once you’ve reached the point of maximum biophysical efficiency, would gdp then be capable of measuring an improvement in the quality of services?

It’s a good question, but for me, the important thing is to limit the physical throughput. If you do that, then what happens to gdp doesn’t matter very much from an environmental perspective. Whatever people do with it is fine. A consumer-sovereignty argument makes sense in that context, because there would no longer be huge external costs of ecological degradation. An economist might argue there would be technological solutions to resource use, so we can set limitations on throughput aside. Technology is something we love, limiting throughput is something we hate, so let’s just focus on the former. My reply would be: if we’re so good at increasing resource productivity, why would you object to throughput limits? That would force progress onto the path of better rather than more, raising the price of resources and increasing the incentive to use them more productively. Today this is discussed as ‘decoupling’ of gdp from throughput. Neoclassical economists argue that there is a very loose coupling between throughput and gdp but a tight coupling between gdp and welfare. Ecological economists think the coupling of throughput with gdp is fairly tight while the coupling of gdp and welfare is loose, or even non-existent beyond some sufficiency threshold.” (