Revised 1 March 2025



“The ecological constraints on population and technological growth will inevitably lead to social and economic systems different from the ones in which we live today. In order to survive, humankind will have to develop what might be called steady state. The steady state formula is so different from the philosophy of endless quantitative growth, which has so far dominated Western civilization, that it may cause widespread public alarm.” -  Rene Dubos, 1969.


The concept of a steady state for humankind is not new. In 322 BC Aristotle stated: 


“Most persons think that a state in order to be happy ought to be large; but even if they are right, they have no idea of what is a large and what is small state...  To the size of states there is a limit, as there is to other things, plants, animals, implements; for none of these retain their natural power when too large or too small, but they either wholly lose their nature, or are spoiled.” (Aristotle c 322 BC)


Steady State describes an economy where the  population and the levels of production and consumption remain constant with minor fluctuations. John Stuart Mill wrote the following in his 1848 book Principles of Political Economy:


 “If the earth must lose that great portion of its pleasantness which it owes to things that the unlimited increase of wealth and population would extirpate from it, for the mere purpose of enabling it to support a larger, but not better or a happier population, I sincerely hope, for the sake of posterity, that they will be content to be stationary, long before necessity compels them to it. … It is scarcely necessary to remark that a stationary condition of capital and population implies no stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the art of living and much more likelihood of its being improved”. (Mill, 1848)


About 80 years later, John Maynard Keynes, the economist whose prescriptions played a dominant role in directing the global economy out of the 1930’s depression, believed that the age of growth was only a temporary one and that in the meantime “foul is useful and fair is not” until we have passed through the growth phase, “the tunnel of economic necessity” (Keynes, 1930).


Arthur Cecil Pigou was an English economist at the University of Cambridge where he trained many Cambridge economists who went on to fill chairs of economics around the world. His main contribution to economics was in the field of welfare economics in which he introduced the concept of externality and the idea that externality problems could be corrected by the imposition of a Pigovian tax. The externality concept remains central to modern welfare economics and particularly to environmental economics.


Pigou wrote his book The Economics of Stationary State as an academic exercise:


“In one sense this book is merely an introductory prelude to economics; for it has nothing to say of processes of change or conditions of disequilibrium. But over the field it covers it aims at being thorough. Starting with very simple conditions and thereafter introducing successive complications, it builds up a picture of the way in which fundamental economic forces work themselves out. The forces are, of course, no less present in a moving than a stationary world. 


… in our imagined stationary state no less than in the actual world, the maximum principle is at work; and the fact that the environing conditions are moderately simple enables us to grasp its significance with sureness and precision. This is my excuse, if excuse be needed, for publishing a book of this character. The analysis worked out in this book cannot by itself make any large contribution to the study of real life. It provides a taking-off place, but little more; a first stage only, which needs extensive supplement. The building is much more than the foundation. But, none the less, to take pains over the foundation is not to waste time.” (Pigou 1935)


Pigou set out the minimum conditions of steady state:


“In every form of economic stationary state, even the least rigorous, the number, the age distribution, the sex distribution and the quality of the units that make up the population, the total amount of work that they do, and the total stock of capital equipment (as measured in the amount of work and waiting that goes to make it) must all be conceived as constant. Of course stationariness in this sense does not mean frozen fixity; individual drops composing the water-fall are continually in movement, though the waterfall itself remains. Wear and tear take place, but it is always exactly offset by replacement. Moreover, the rates of wear and tear and replacement are constant; there are no jumps involving variations in the aggregate of work done by industries that make capital goods.” (Pigou 1935)


Kenneth Boulding, an economist, challenged the assumptions of the standard neoclassical growth model and identified the need for the economic system to fit itself to the ecological system with its limited pools of resources. His 1966 essay The Economics of the Coming Spaceship Earth argued that the standard model of an open economy (he called it a “cowboy” economy) failed to reflect the reality of limits to growth by using a space-age metaphor to express the idea of limits when he introduced the metaphor of our Earth as a spaceship.


Nicholas Georgescu-Roegen was a Romanian mathematician, statistician and  economist. Paul Samuelson, an awardee of a Nobel Memorial Prize in Economic Sciences in 1970, described Georgescu-Roegen as being “The Economist’s Economist” (Mayumi 1999). In his 1971 book The Entropy Law and the Economic  Process, Georgescu-Roegen argued that economic scarcity is rooted in physical reality with the economy being constrained by the laws of physics, that all natural  resources are irreversibly degraded when put to use in economic activity, and that all of earth’s mineral  resources will eventually be exhausted at some indeterminate time in the future. Georgescu-Roegen argued that economists had limited their analysis in the traditional circular flow model of the economy and ignored the obvious fact that economic processes take place in a larger biophysical realm. Georgescu-Roegen’s work subsequently underpinned the establishment of ecological economics  as an independent academic sub-discipline in  economics.


Herman Daly was once a Senior Economist at the World Bank. Daly studied with Georgescu Roegen at Vanderbilt University and became a central proponent of the steady state economy starting with his 1968 article On Economics as a Life Science in which he wrote: 


“The purpose of this essay is to bring together some of the more salient similarities between biology and economics and to argue that, far from being superficial, these analogies are profoundly rooted in the fact that the ultimate subject matter of biology and economics is one, viz., the life process. Most of biology concentrates on the “within skin “life process, the exception being ecology, which focuses on the “outside skin” life process. … Economics is the part of ecology which studies the outside-skin life process insofar as it is dominated by commodities their interrelations.  And In what follows the traditional economic (outside skin) and the traditional biological (within skin) views of the total life process will be considered, both in their steady-state aspect and in their evolutionary aspect. Finally an approach to a more general "general equilibrium" model will be suggested by considering the human economy from an ecological perspective.” (Daly 1968)


Daly was the editor of the book “Toward a Steady-State Economy” published in 1973. The book included his article The Steady-State Economy: Towards a Political Economy of Biophysical Equilibrium and Moral Growth. Other authors included Georgescu-Roegen, Kenneth Boulding, William Ophuls, E.F. Schumacher, the co-authors Jorgan Randers and Donella Meadow, and John Cobb. These authors in the 1970s, plus Howard Odum who wrote Environment, Power, and Society published in 1971 and Energy Basis for Man and Nature published in 1976, formed a core of writers who contributed to the development of ecological/steady state economics. There are many other researchers who have published peer reviewed publications in international journals on ecological/steady state/biophysical economics. These include Robert Costanza (his PhD was supervised by Howard Odum), John Gowdy, Cutler Cleveland, Mahe Faber, Kozo Mayumi (a disciple of Georgescu-Roegen), Mario Giampietro, Gael Plumecocq, Matthias Ruth etc. The list goes on and I am doing researchers a disfavour by leaving their names out.


Herman Daly continued to publish many articles on steady state economics in peer reviewed journals over the next number of decades and he co-authored the 834-page textbook Ecological Economics: Principles and Applications with Joshua Farley in 2004. In 2018, Charles Hall (his PhD on systems ecology was supervised by Howard Odum) and Kent Klitgaard followed up with another textbook based on the concept of steady state titled Energy and the Wealth of Nations: An Introduction to Biophysical Economics.


In the summer of 1970, Professor Jay Forrester of MIT presented a global computer model to the Club of Rome conference in Cambridge, Massachusetts. This global model enabled the analysis of the behaviour and dynamic relationships of over 100 factors including population, agricultural production, natural resources, industrial production, and pollution. An international team under the direction of Donna Meadows was set up to examine five basic factors that determine and ultimately limit growth on our planet using the same modelling approach. Many different model runs were made based on different inputs of the physical aspects of humankind’s behaviour. In all model runs capital and population growth were allowed to continue until they reached some natural limits. 


The results of the study were published in the book The Limits to Growth (1972).  When population and capital growth were allowed to grow without human constraints, there was no policy that avoided the scenario of an exponential growth of population and capital followed by collapse. Some policies delayed collapse, but a collapse scenario by the year 2100 and earlier were common to all model runs without human constraint. 



Figure 1: Limits to Growth (Meadows et al. 1972)



The minimum requirements for global equilibrium, or steady state, were defined as being: 


  • “The capital plant and the population are constant in size. The birth rate equals the death rate and the capital investment rate equals the depreciation rate. 
  • All input and output rates – births, deaths, investment, and depreciation – are kept to a minimum. 
  • The levels of capital and population and the ratio of the two are set in accordance with the values of the society. They may be deliberately revised and slowly adjusted as the advance of technology creates new options.” 


The Limits to Growth (1972) was interpreted by some critics as being a prediction of gloom. This is incorrect. The Limits to Growth (1972) was not about a preordained future, but instead was about choice. The Limits to Growth (1972) raised questions such as: 


  • What will happen if growth in the world’s population continues unchecked? 
  • What will be the environmental consequences if economic growth continues at its current pace?
  • What can be done to ensure a human economy that provides sufficiently for all and that also fits within the physical limits of the Earth?