Stationary economy

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The forest pasture is an ideal example of a theoretically possible, stationary economy - but even with this, self-sufficient sustainability has not yet been achieved.

In economic and social history , the term static economy or stationary economy is used when no economic growth has been planned or not felt over a longer period of time . While for most economists a stationary economy is perceived as undesirable stagnation , it is demanded by representatives of the critique of growth and the movement critical of growth . In German-speaking countries, the terms post-growth economy (established by Niko Paech from 2006 ), post-growth society (since 2009) or post-growth for short are used.

The theoretical concept of a stationary economy serves as a model in economics in which all macroeconomic factors are in a long-term equilibrium and only reproduce themselves, i.e. there is no population growth , capital accumulation, or technical progress . In models of growth theory , the conditions can be examined which changes in these factors together lead to zero growth.

history

Long-term perspective of the classical economists

The concept of the stationary state was first mentioned by Adam Smith . He and other representatives of classical economics feared stationarity as the inevitable end point of economic growth and development, triggered by population growth and decreasing yields. Thomas Robert Malthus described the population trap as the inevitable dystopia of a society in which capital accumulation had ended due to a rapidly increasing population, but the population was poor and had difficulties in ensuring its own supplies. He justified this with the exponential growth of the population with a linearly growing food supply, so that the ecological carrying capacity of the habitat would be exceeded. David Ricardo, on the other hand, problematized the end of the increase in prosperity and resources of a community associated with the end of economic growth , which he, however, characterized as "far away". Both Ricardo and Adam Smith recommended trading as a way out of the dilemma. John Stuart Mill, on the other hand, saw a desirable end state in the stationary state: He assumed that people "would be satisfied in the stationary state long before the necessity forced them to do so".

Zero growth as an avoidable problem

The technical progress of industrialization and the use of fossil energy to increase labor productivity changed the perception of the stationary state of economists. Concerns about declining agricultural yields and the depletion of non-renewable resources were brushed aside and economic growth seemed unlimited. The supply of food was made possible in particular through the use of mineral fertilizers and fuels. This economic development was accompanied by theories of the philosophers of the Enlightenment , which combined the delimitation and overcoming of natural boundaries to a growth and progress thinking. For economists, the stagnation turned out to be undesirable and avoidable and only relevant as an analytical special case.

Keynes and Schumpeter

For John Maynard Keynes and Joseph Schumpeter , however, the steady-state condition continued to be an important long-term perspective. Keynes predicted around 1930 that his grandchildren could solve the economic problem of scarcity within the next 100 years, creating a "golden age" of permanent growth slowdown. In this case Keynes recommends the following economic policy measures:

  • Equal distribution of purchasing power between people. An equal income leads to an increase in mass consumption.
  • Reduction of working hours to 15 hours per week
  • A higher tax rate to support the infrastructure and public services.

In his book Capitalism, Socialism and Democracy , published in 1942, Schumpeter assumed that if there was no economic growth, capitalism would be replaced by a socialist economic order.

Growth Criticism and the Steady State Economy

High-quality, natural resources are converted into low-energy and often harmful substances in the satisfaction of human needs

With the emergence of the growth criticism and the publication of the “Limits to Growth” , the concept of a stationary economy was again increasingly discussed. The previous growth theory was contrasted with arguments from thermodynamics such as Nicholas Georgescu-Roegen , who considered any growth and its decoupling from resource consumption as impossible. This is criticized by economists who believe that a decoupling of resource consumption and economic growth is possible. From the ideas of his mentor Georgescu-Roegen, Herman Daly developed the concept of the steady-state economy , which provides for a constant population and a no longer growing stock of objects that are maintained by the lowest possible throughput of matter and energy. Like Mill, he sees great benefit in having society implement the concept before it becomes inevitable.

Post-growth economy and society

From 2006, Niko Paech developed a concept of a non-growing economy in Germany under the term post -growth economy. The core idea of ​​his proposal is to abolish structural and cultural growth drivers and growth constraints by means of five principles: institutional innovations, material zero-sum games, regional economy, subsistence and sufficiency.

From 2009 Barbara Muraca , Irmi Seidl and Angelika Zahrnt used the term post-growth society; The short form post-growth is also used to discuss the effects of zero growth. A non-growing economy has also been suggested by scholars such as Tim Jackson in his book Prosperity Without Growth or Peter Victor .

In addition to the need to overcome the political objective of economic growth , the extent to which a stationary economy is compatible with today's institutions is examined. Under the concept of forced growth , it is discussed to what extent the monetary economy, the social systems , the stock exchange , the profit orientation of companies or the threat of unemployment due to technical progress on the labor market justify a dependency on growth if economic or social stability is not to be jeopardized. It is a central, controversial question of the growth critical movement how these growth pressures can be overcome.

The steady state in economic models

For models, Paul A. Samuelson differentiates between the terms stationary as a term that describes the constancy of an economic variable over time, and static for the classification of the laws that describe the system behavior timelessly as opposed to dynamic . In comparative static models like most CGE models is believed that the economy is for a brief moment in a steady state, in particular no technological changes and there are no investments. The well-known static equilibrium models can then be used for price formation , allocation and distribution in market equilibrium . In order to describe growth or change processes, several successive states of equilibrium are then considered and in this way the basic model is also used to describe the real, changing economy. A steady state of a dynamic model is reached when all macroeconomic factors are in a long-term equilibrium and only reproduce themselves, for example the investments compensate for the depreciation .

However, zero growth can also be achieved in a model in that innovations or sectoral changes take place, but when taken together with other changes they do not lead to growth. The conditions for this can be specified for the various growth theories in the history of economic theory .

Zero growth in neoclassical models

In the Solow model without population growth and technical progress , the capital stock gradually converges and the per capita income gradually converges to a stationary state.

In the neoclassical theory that depends economic growth from the use of various factors of production from that make up a substitutional production function , the economic performance can be determined. Since market clearance is always assumed, zero growth cannot lead to an economic crisis with underemployment or similar instabilities.

In the Solow model with a Cobb-Douglas production function , zero growth without technical progress and population growth is achieved when the gross investments calculated using a fixed savings rate exactly correspond to the depreciation. As soon as there is positive technical progress, zero growth can be achieved either through a negative savings rate or a falling supply of labor . In the Ramsey – Cass – Koopmans model , there is a stationary capital stock without technical progress if the real interest rate corresponds to the depreciation rate plus the time preference rate . Again, positive technical progress can be compensated by reducing the number of jobs. Since the production factor labor is not modeled in the AK model , positive technical progress must be compensated for by a reduction in the capital stock in order to achieve zero growth.

In environmental economic models such as the Green Solow Model or the Dasgupta-Heal-Solow-Stiglitz model, the consumption of a non-renewable raw material is also modeled. When using a CES production function , stable zero growth is only possible if the substitution elasticity of the raw material is sufficiently large that it can be replaced by capital accumulation and technology.

Zero growth in Keynesian models

Convergence to a steady state in a dynamic macroeconomic stock-flow consistent model with post-Keynesian behavioral assumptions.

Similar to neoclassical theories, technical progress is a decisive driver of growth in Keynesianism . Since in Keynesian theories there can be an equilibrium with underemployment , a reduction in average working hours with full wage compensation is necessary in the case of zero growth in order to prevent unemployment and the decline in the wage share . At the same time, the gross investment must correspond to the depreciation . In Keynesian models such as the Harrod-Domar model , instabilities can arise because no market mechanism is assumed that always brings supply and demand into market equilibrium ( growth on the knife edge ).

The question of whether zero growth is stable or whether there is a compulsion to grow was also examined in various post-Keynesian stock-flow consistent models . The condition for a steady state in these complex dynamic models is that the stock sizes are constant and the different flow sizes (labor income, interest income, consumption ...) just balance out. The thesis that zero growth is not possible for reasons inherent in the system, regardless of the behavior of the actors, as expressed by Hans Christoph Binswanger or Mathias Binswanger , for example , was rejected. However, conditions for behavioral equations such as consumption function could be derived, which are a necessary condition for zero growth. In particular, the consumption from wealth must be greater than the portion of the interest income that is not directly consumed again, so that no accumulation takes place.

Zero growth in Marxist theory

According to Marxist theory , zero growth is incompatible with capitalism because competition forces accumulation . This leads to underconsumption and overproduction crises again and again , but not to a stable steady state. One way out is the collectivization of companies, the explicit limitation of the consumption of raw materials and the shortening of working hours in order to prevent unemployment .

literature

Web links

Individual evidence

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  2. ↑ z. B. “His ideal is a static society and a static economy.” In: Richard Newald: Afterlife of the ancient spirit in the West up to the beginning of humanism: an overview. 1960, p. 389 or “In view of a mostly static economy, structural mobility directed upwards has never been observed.” In: Social history of the early modern times at a glance, Prof. Dr. Ulrich Pfister, winter semester 1999/2000, 3rd mobility and status acquisition, online ( memento from March 4, 2014 in the Internet Archive )
  3. ↑ a b Niko Paech : Liberation from Abundance. On the way to the post-growth economy . oekom Verlag , Munich 2012, ISBN 978-3-86581-181-3 .
  4. ^ André Reichel : Strategic options for action for companies in the post-growth economy . In: Hans Christoph Binswanger u. a. (Ed.): Yearbook Sustainable Economy 2013/2014. In focus: sustainability management . Metropolis, Marburg 2013, ISBN 978-3-7316-1043-4 .
  5. ↑ a b Barbara Muraca : Sustainability without growth? On the way to the décroissance. Theoretical approaches for a convivial post-growth society . In: Tanja von Egan-Krieger, Julia Schultz, Philipp Pratap Thapa, Lieske Voget (ed.): The Greifswald theory of strong sustainability - expansion, application and criticism . Metropolis, Marburg 2009, ISBN 978-3-89518-750-6 , pp. 241-261 .
  6. ↑ a b c Irmi Seidl, Angelika Zahrnt (ed.): Post-growth society - concepts for the future. Metropolis, Marburg 2010. ISBN 978-3-89518-811-4 .
  7. ↑ a b c Dirk Posse: Sustainable companies in a post-growth society . A theoretical and empirical study. Association for Ecological Economics , Heidelberg 2015, ISBN 978-3-9811006-2-4 ( hdl : 10419/110257 ).
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  69. ^ Steffen Lange: Macroeconomics Without Growth: Sustainable Economies in Neoclassical, Keynesian and Marxian Theories . Metropolis, Marburg 2018. ISBN 978-3-7316-1298-8 . Chapter 12.3.
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