Super Eco

Photo credit: sarah gilbert

A steady-state economy is both an economic and environmental concept, in which the rate of growth or decline of population and capital is in balance, and the effects on the environment are sustainable. In other words, it is a state of the economy where birth and death rates are about equal, and production equals depreciation. In classical economics, John Stuart Mills' 'stationary state' economy is simply one which is neither growing nor receding; in neoclassical economics, the 'steady-state economy' is one in which output per worker equals capital per worker (steady ratios of capital and labor). But in ecologocial economics, the primary goal is sustainability. As neither economic growth nor economic recession are truly sustainable, the goal in ecological economics is a steady state economy.

In the environmental sense, a steady-state economy is not so precise as in neoclassical economics, and uses the term “constancy” of population and capital stocks to imply mild fluctuations in the short term, which nonetheless exhibit stable equilibrium in the long term.