DEFINITION of Steady-State Economy
A steady-state economy is an economy structured to balance growth with environmental integrity. A steady-state economy seeks to find an equilibrium between production growth and population growth. The economy aims for the efficient use of natural resources but also seeks fair distribution of the wealth generated from the development of those resources.
BREAKING DOWN Steady-State Economy
The possibility of a steady-state economy comes down to balance: economies may grow or contract, but ultimately fight back to an equilibrium. Ecological economists – major supporters of the idea of a steady-state economy – posit that the environment cannot support an unlimited growth of production and wealth, since a growing population will eventually push down wages and use up an increasingly scarce base of natural resources.
How Differing Perspectives View the Concept of a Steady-State Economy
Interpretations of how a steady-state economy would function can be a point of conflict. From one perspective, such an economy would see industrial and ecological growth in tandem with each other, or at least see their growth push and pull each other until there was balance. However, there have been some interpretations that posit that the constraints put in place to enforce stability in such an economy would not allow for any growth. Also, from this perspective, it is believed the economy would be less susceptible to cyclical patterns of boom and bust.
Under a steady-state economy, a society would be less likely to see sprawling real estate development because of the various pressures and directives put in place for balance. That would mean construction activities would likely be focused on redevelopment and repurposing of space rather than clearing out a new property for building.
There would also be a focus to only make use of resources that can be replenished, such as water and sustainable energy sources but only at a pace that the resource would be able to safely regenerate. This would stifle the vigorous development that heavily industrialized societies are used to. Fossil fuels would only be consumed at a pace at which they could be replaced with renewable energy.
Furthermore, practices such as creating landfills and other sites where waste is stockpiled would be curbed. Such an approach also means overall production would have to be balanced with the capacity to accommodate the waste that would be generated, thereby alleviating the piling up of refuse. It would also encourage production wherein the end results are goods that can more readily degrade quickly rather than remain static and not decompose, such as the case with various plastics.