Growth isn't the answer

[unitsinc]

I've been following the concept of a steady state economy ever since I first heard of the idea.

I'll be the first to admit it's always been a bit of a fringe concept, but I saw this:

http://www.guardian.co.uk/commentisfree/2012/sep/03/debt-federal-reserve-fixation-on-growth?CMP=email


And that is one of the first real mentions I've seen on a pretty mainstream media outlet.

I guess the tie-in to MMM is the fact that all of us more or less depend on investment income.
I don't see this happening overnight(or possibly ever) but it would definitely be an interesting time for investing, to say the least.

[AdrianM]

What a load of Zombie rubbish.  They current system is predicated on unsound money and debt.
It will all end in tears.

My thoughts on how to fix this mess.

We need to run our economies on Austrian economic principles.
http://en.wikipedia.org/wiki/Austrian_School

And our governments on libertarian principles.
http://en.wikipedia.org/wiki/Libertarianism

[stigto]

The article made me think of professor Steve Keen http://www.debtdeflation.com/blogs/ who also advocates a modern debt jubilee to get rid of debt and allow the economy to recover. Even Adam Smith recognised that you can't have exponential growth forever, so that is hardly a fringe idea. A steady state economy doesn't mean that you can't make money from investing, but your money won't grow exponentially. Also it implies a stable population, so I don't think I'll see it in our lifetimes.

[SJ]

That article is brilliant.  And so is Mr. Eisenstein's ideas about money as laid out in his recent book Sacred Economics.  Highly recommended to all Mustachians.

[arebelspy]

I agree with almost everything in this thread.

Those in power don't.  So it'll be a long time before the transition.  I don't see it happening in my lifetime.

[elindbe2]

I enjoy eisenstein's ideas quite a bit, even if he does tend to be a bit "out there".  But I've been having some cognitive dissonance about some of the issues he raises.  If the economy is predicated on infinite exponential growth (which I agree is impossible) in order to satisfy debt obligations, then is FIRE a sustainable goal?  We're building a nest egg in hopes to live off of the interest and dividends it provides.  Obviously, it's worked well so far for many people, including MMM, but is this a reasonable goal in the medium to long-term?  Would Mustachian ideas still play a role in a "post-debt" society?

[Bakari]

You don't have to get interest in order to live on savings.
If, for example, you make 5 times what you spend, you could work for 10-15 years, and live off of savings the rest of your life, even if you got no interest (or equivalent).

If everyone were to think in MMM / YMOYL type terms and buy less crap, there would be less work that needed to get done, and early retirement (or 5-10 hour work weeks) would become the standard normal