top of page
Search

What does 'economic development' really mean, and how can we redefine it?

"The only way to arrive at a safe, sustainable, steady state economy is with substantial behavioral and political reform."


An expanded version of this article by Brian Czech, founding president and executive director of our member organization, Center for the Advancement of the Steady State Economy (CASSE), was first published in CASSE's Steady State Herald on 7 Sept, 2023, under the title Defining “Economic Development” in Statutory Law: Content and Strategy. Read it here. We've printed an accessible abridged version. Consider also Rosalie Bull on "Degrowth in a Green-Growth World."


Photo credit: Wikipedia Commons_100 Resilient Cities - Woolsey Fire Public Domain. Photo courtesy of Peter Buschmann, United States Forest Service, USDA. Some additional editing by W.Carter.

 

The only way to arrive at a safe, sustainable, steady state economy is with substantial behavioral and political reform. Those two categories of reform correspond roughly with the demand side and supply side of the economy, respectively. In the simplest of terms, people must conscientiously demand less—wealthy people in particular—and policymakers must help ensure that the supply of goods and services is not in a state of overshoot.


My focus here is on the supply side. That means all economic production: agriculture, extraction, manufacturing, and services. The level of economic activity is steered to a significant extent by public policy, most obviously in socialist nations but clearly enough in capitalist democracies as well.


I’ll focus on the USA, but the principles will apply to international politics as well. Governments around the world need to intentionally and explicitly get off the growth path and help their nations move toward a steady state economy. For the wealthier countries in an advanced state of overshoot, clearly including the USA, the goal should be degrowth toward a steady state economy.


I will argue that the place to start with policy reform is statutory law; that is, the bills hammered out in Congress and signed into law by the President. I will further argue—surprisingly to some—that the most strategic starting point is with laws propounding the phrase “economic development.” Amendatory language in the economic development laws will open the door for the big prize: divorcing the government from “economic growth.”


Growth and Development in the Vernacular

In the vernacular, economic development is hardly discernible from economic growth. When people think of economic development, they think of more roads, facilities, houses, and businesses. That’s also growth, plain and simple. Yet the mere existence of the two phrases indicates that there is, or should be, some distinction between growth and development.

Fortunately, vernacular languages change with the times. Already, in the vernacular of certain segments of society, “development” tends to connote an improvement, a bettering, an increase in the quality of life that is not so clearly or prevalently implied by “growth.” This was a key point of a 2010 book by Daphne Greenwood and Richard Holt, Local Economic Development in the 21st Century. The subtitle gets the point across as succinctly as possible: Quality of Life and Sustainability.


An even more telling phrase is the title of their Chapter 1: “Economic Growth vs. Economic Development.” Referencing the work of Herman Daly, among others, they support the argument that growth and development are not one and the same. They elaborate extensively on the concept and process of economic development throughout the book, but their basic definition is concise: “a broadly based and sustainable increase in the overall standard of living for individuals within a community.” For Greenwood and Holt, the “standard of living” is not equated (as conventional economists often equate it) with GDP growth, either.


If only all entities would distinguish so agreeably between growth and development, we’d be in steady-state business. Unfortunately, that is far from the case. Conventional economics is still a pro-growth pursuit, and many of our economists in civil service learned their craft in the neoclassical departments of American academe.


Where the academic rubber meets the public policy road, the tendency is once again to combine growth and development into a relatively seamless concept. The mission of the U.S. Economic Development Administration (EDA), for example, is to “lead the federal economic development agenda by promoting innovation and competitiveness, preparing American regions for growth and success in the worldwide economy.” They define economic development as “Creating the conditions for economic growth and improved quality of life by expanding the capacity of individuals, businesses, and communities to maximize the use of their talents and skills to support innovation, job creation, and private investment.”


While the EDA has defined economic development, Congress has not. The EDA clearly took liberties in defining economic development in terms of growth. That gives steady staters a meaningful, feasible opportunity for some highly effective policy reform.


Then What?

Idealists and dreamers may shrug their shoulders and lament, “Big deal, a definition of economic development. What about all the emphasis on economic growth per se?” And they’d have a point, with 73 “binding references” to economic growth in the United States Code. Yet we have to start somewhere; we have to find traction in the terrain of public policy reform. Defining economic development would clearly be more “tractionable” than superseding economic growth at this point in the history of statutory law.

The United States Code: in need of steady statesmanship. (Wikimedia)


Such an inroad to statutory law would indeed “crack the Code” open, begging questions like, “Under what circumstances is economic growth not conducive to economic development?” Such questions would call for additional definitions of terms required for steady statesmanship. Terms like “natural capital,” “ecosystem services,” “carrying capacity,” “ecological footprint,” “biocapacity,” and perhaps the summum bonum of steady statesmanship: “optimal scale.”


Defining economic development in statutory law would make John Stuart Mill, Herman Daly, and Daphne Greenwood proud. It would be the greatest achievement to date in bringing ecological economics, steady-state economics, and degrowth principles into public policy. Furthermore, it would lower the propensity of the U.S. government to push for GDP growth, truly “by definition.”


I’d call that a major economic development.

 

Read Brian's full original article here in the Steady State Herald.



9 views0 comments
bottom of page