To read this content please select one of the options below:

The Need for a Steady State Economy

Willem J.M. Heijman (Wageningen Agricultural University, The Netherlands)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 1 March 1988

122

Abstract

Until recently, general economic theory has hardly paid any attention to the production factor “nature”. Human economy has been characterised as a closed system, in which all kinds of products are produced through the input of the production factors “labour” and “capital” and then consumed. This appears to be no longer valid. Human economy interferes with the environment and is therefore an open system. Nowadays the consequences of this are thoroughly investigated in environmental economics, a borderland between economics on the one hand and ecology on the other. The purpose of this article is to contribute to this line of thought. The production factor “nature” can be seen as a stock of capital, one part of which consists of non‐renewable resources and the other of renewable resources. This latter has a limited renewal capacity. Both kinds of resources are exhaustible. Human production reduces total stock, so that the change in it is the result of depletion of nature by production and of natural renewal. If natural renewal equals human expenditure of nature, one can speak of a steady state. In the next section, a brief discussion of an efficiency rule for the use of exhaustible resources is followed by an examination of renewable resources. As opposed to non‐renewable resources, ecological aspects play a major part in the optimum management of this kind of resource. The concept of the “optimum steady state” is developed to show the ecological constraints of human production insofar as it is based on the stock of renewable resources. Finally, there is a discussion on two types of nature‐conserving technological change, which could widen the ecological borders.

Citation

Heijman, W.J.M. (1988), "The Need for a Steady State Economy", International Journal of Social Economics, Vol. 15 No. 3/4, pp. 80-87. https://doi.org/10.1108/eb014105

Publisher

:

MCB UP Ltd

Copyright © 1988, MCB UP Limited

Related articles