Steady State Economics Re-Imagined For the 21st Century - Voila, the Circular Economy.
Cambridge University sent an email this morning inviting me to register for a 6-week course on the circular economy. I'm not interested in parting with $2,000 (USD) so I passed.
There are plenty of papers available online dealing with the circular economy which is really an extension of the steady-state economics of the 20th century. Wiki captures the gist of steady state, an idea that was first floated by Adam Smith in his 1776 classic, "The Wealth of Nations."
A steady-state economy is an economy made up of a constant stock of physical wealth (capital) and a constant population size. In effect, such an economy does not grow in the course of time. The term usually refers to the national economy of a particular country, but it is also applicable to the economic system of a city, a region, or the entire world. Early in the history of economic thought, classical economist Adam Smith of the 18th century developed the concept of a stationary state of an economy: Smith believed that any national economy in the world would sooner or later settle in a final state of stationarity.The most remarkable thing about Smith's vision was that he came to it nearly a hundred years before the start of the Industrial Revolution and at a time when the global population was barely 0.8 billion, not that Smith could have known that at the time.
Steady state theory gained traction after WWII but all that was derailed by the advent of the neoliberal order and the blind pursuit of perpetual exponential growth, the GDP fetish of just about every political leader in the Western world.
We can see how this growth business ends. That's evident in just about every ecological and environmental threat that now confronts us or looms on the horizon. We don't have but two options. We either change to conform to reality on our own terms or wait for change not on our terms. Either way we are going to change. It's change or be changed.
This is why we should at least explore the circular economy idea. This chart captures the basic distinction between today's linear economy and a circular economy.
In today’s economy we take a resource out of the ground and turn it into a product that is destined to become waste because of the way it has been designed and made. This is a linear economy and is often summarised by "take, make, waste".
A circular economy employs reuse, sharing, repair, refurbishment, remanufacturing and recycling to create a closed-loop system, minimising the use of resource inputs and the creation of waste, pollution and carbon emissions. The circular economy aims to keep products, materials, equipment and infrastructure in use for longer, thus improving the productivity of these resources. Waste materials and energy should become input for other processes through waste valorization: either as a component or recovered resource for another industrial process or as regenerative resources for nature (e.g., compost). This regenerative approach is in contrast to the traditional linear economy, which has a "take, make, dispose" model of production.
Why, especially today, are we not flocking to a new economic paradigm that is so sensible and addresses many of our mounting problems and challenges? Why? For the same reason our leaders balk at turning against fossil fuels. While they should be guided by the public interest, they're really in service to the energy giants, the banks, the pension funds and all their lobbyists. That much is inescapable from their penchant for greenwashing. They have to say something but they can't be honest.
The idea is catching on. I figured that out from the invitations I received from Cambridge and MIT to take their courses for a mere couple of thousand dollars here and there.
Fortunately, while our leaders are avoiding reality, the Euros are implementing their own circular economy action plan.
Measures that will be introduced under the new action plan aim to make sustainable products the norm in the EU, empower consumers and public buyers, focus on the sectors that use most resources and where the potential for circularity is high such as: electronics and ICT, batteries and vehicles, packaging, plastics, textiles, construction and buildings, food, water and nutrients
ensure less waste, make circularity work for people, regions and cities, lead global efforts on circular economy.
The Euro Green Deal has a 35 point action plan and - wait for it - a clear timetable for implementation.
This isn't the sort of vague, aspirational horseshit Ottawa dishes out. I suppose the Euros realize we don't have the luxury of that sort of timetable.
This may be beyond the grasp of Trudeau's Advisory Council on Economic Growth. I don't think it's what Morneau had in mind. We're going to need a new Table with seats that can accommodate farts completely different from the old ones.
ReplyDeleteAn orthodoxy has been in place since Reagan/Thatcher, Bill.
DeleteJohn Ralston Saul points out in "The Collapse of Globalism" that economic models such as neoliberal globalism come and go on a roughly 30 year cycle. That's because economics is really a social science, to the extent it's a science at all. It's a belief-based discipline that gives rise to belief-based economic models. When a model loses its lustre and fails to deliver on promises it could never hope to meet, we go to the "next great thing."
When Saul wrote his book in 2005 he proclaimed neoliberal globalism over. It had indeed failed to deliver on its egalitarian promise. He said we were in an interregnum while the West shifted to a new model. By current count we're in a 16-year interregnum. Something has blocked the pipes.
To me we're trapped in the same model but this is the damage phase. It was supposed to make us all better off. We were promised a new economy, a "knowledge economy" in which we would be awash in better, higher paid jobs. The poorer nations would inherit our manufacturing sector and that, in turn, would give them their workers' paradise.
Of course that hasn't happened. Our knowledge economy turned into a gig economy. People work longer for the same, sometimes less. In the nations where those manufacturing jobs were sent, a host of long term problems have set in.
So, if the lowly working class has not benefitted, who has? That would be the 1 per cent. Neoliberalism has ushered in the greatest transfer of wealth out of the pockets of the many into the bank accounts and offshore tax havens of the few. Never has wealth been so concentrated, not since the feudal age. And these few have used their influence to keep this scam going.
A scam? For sure. That's evident in what the rich, our new aristocracy, do with their newfound wealth. What they don't do is invest it in the economy. They're amassing wealth just like the old nobles did. They go to some lengths to stash their loot out of the prying eyes of tax collectors.
It was reported last week that the Canadian Revenue Agency has not prosecuted even one case of tax evasion by the rich. The KPMG/Isle of Man tax scam proved how these "investments" are sold - as means to keep the wife from getting her hands on your loot and to hide them from the revenuers. Not one prosecution there either.
Could this be happening without the efforts of our ruling parties, Conservative and Liberal? How?
We knew JT was bent when, early in his first term, he got caught in a "cash for access" scandal. Since then, in true JT fashion, we've had lots of soothing words followed by very little action. Is this government corrupt? We can only guess.
What requires no guesswork is that the Trudeau government, despite the changes unfolding sometimes in horrific ways, is a devout globalist, a free trader and an ardent disciple of perpetual, exponential growth.
An old idea whose time has come -- but probably won't.
DeleteI expect you're right, Owen. There are powerful vested interests with deep connections to both major parties that will use their influence to block any threat to the fossil energy industry or this no longer useful economic model. You won't hear any pol, Liberal or Conservative, suggest moving to something better for our nation and our people.
Delete