ABSTRACT
Daly is perhaps best known for his work on the steady-state economy which has an interesting history to which many notable economists have contributed. Following in the footsteps of John Stuart Mill, Daly wrote several books and many papers explaining the rationale for a steady-state economy defined in terms of material and energy throughput and/or the maintenance of fixed capital stocks. The first and second laws of thermodynamics feature prominently in his analysis. They led him to develop a new interpretation of efficiency based on physical rather than financial flows. In his steady-state economics Daly also explored the moral questions and institutional implications of the end of growth, post-growth, degrowth, and other terms virtually synonymous with steady-state. One important example is his proposal with John Cobb of ‘person in community’, as a substantive modification to the self-interested, socially isolated, hedonistic ‘homo economicus’ embodied in neo-classical economics.
Drawing from Daly’s extensive writings, the chapter presents 28 principles of steady-state economics grouped under: pre-analytic vision of paradigm, economic structure, macroeconomics, microeconomics, money and banking, internationalization not globalization, population, and institutions. The chapter ends with his ten policies for a steady-state economy that have been widely cited.
