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Supply Shock: Economic Growth at the Crossroads and the Steady State Solution, by Brian Czech
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Politicians, economists, and Wall Street would have us believe that limitless economic expansion is the Holy Grail, and that there is no conflict between growing the economy and protecting the environment. Supply Shock debunks these widely accepted myths and demonstrates that we are in fact navigating the end of the era of economic growth, and that the only sustainable alternative is the development of a steady state economy.
Starting with a refreshingly accessible, comprehensive critique of economic growth, the author engages readers in an enormous topic that affects everyone in every country. Publishers Weekly favorably compared Brian Czech to Carl Sagan for popularizing their difficult subjects; Supply Shock shows why.
Czech presents a compelling alternative to growth based on keen scientific, economic, and political insights including:
- The "trophic theory of money"
- The overlooked source of technological progress that prevents us from reconciling growth and environmental protection
- Bold yet practical policies for establishing a steady state economy
Supply Shock leaves no doubt that the biggest idea of the twentieth century—economic growth—has become the biggest problem of the twenty-first. Required reading for anyone concerned about the world our children and grandchildren will inherit, this landmark work lays a solid foundation for a new economic model, perhaps in time for preventing global catastrophes; certainly in time for lessening the damages.
Brian Czech is the founder of Center for the Advancement of the Steady State Economy (CASSE), the leading organization promoting the transition from unsustainable growth to a new economic paradigm.
- Sales Rank: #791842 in eBooks
- Published on: 2013-04-26
- Released on: 2013-04-26
- Format: Kindle eBook
Review
It may be premature to call this book a masterpiece, but it's evident that Czech has mastered the art of melding science, economics, policy and politics in one readable piece. Supply Shock belongs in the classroom, boardroom, town halls and policy circles. It belongs in the hands of all those who care, as Czech might say, "about the grandkids."
---Herman Daly, Professor Emeritus, University of Maryland, School of Public Policy; author of Steady State Economics; Lifetime Achievement Award winner, National Council for Science and the Environment from the Foreword
Brian Czech has used a remarkable combination of education and experience to build a solid reputation as an innovative thinker. His newest book, Supply Shock, is an adventure in learning. Czech's vision of "steady statesmanship" is impressive and convincing, and this book easily qualifies as one of the key manuals for those who care about the world and its inhabitants.
---Lynn Greenwalt, former director, U.S. Fish and Wildlife Service
An old economic world is dying, and a new economic world is being born. Brian Czech is one of the midwives of this new economic world.
---Governor Richard D. Lamm
Supply Shock clearly describes the heart of what ails us--a zombie-like addiction to economic growth everywhere at all costs. Brian Czech brilliantly dissects the economic theories, models, and mindsets that are diminishing the human prospect while calling it 'progress'. . . . King Midas would have understood the point, as we will someday."
---David W. Orr is Paul Sears Distinguished Professor of Environmental Studies and Politics and Senior Adviser to the President, Oberlin College; author of seven books; Lyndhurst Prize winner
Supply Shock brings together the keen observations of a skilled biologist with a deep understanding of our failing economic system. Brian Czech has come up with the major economic rethinking needed to prevent cascading collapses of human societies and the rest of the species on the planet.
---Brent Blackwelder, Past President, Friends of the Earth; Founding President, American Rivers
This is a brave book that raises questions we all need to ask and try to answer. With remarkable clarity, Czech proposes the evolution of a revolution, thinking and feeling and working our way toward a fair, sustainable, constructive social order in America and all around the world.
---Neil Patterson, president, Neil Patterson Productions; co-founder, Norton Science publishing
Brian Czech has dedicated his entire professional life to the study of wildlife conservation, environmental protection, and human society. Supply Shock is the culmination of this thinking, and should be read by leaders as well as upcoming professionals in natural resource conservation and environmental management. Bold leadership – the kind needed for conservation of the world’s natural resources and habitats – can be enhanced by Czech's vision of steady statesmanship.
---Paul R. Krausman, Boone and Crockett Professor of Wildlife Conservation, University of Montana, and past president, The Wildlife Society
This well-written and comprehensive volume is a great resource for questioning “economic growth” and moving towards a new paradigm for the earth’s future.
---Doug La Follette, Secretary of State, Wisconsin
Brian Czech marries economics, biology and political science in a brilliant account of why we need to abandon growth and build a new governance system. There is no sociable alternative to the steady state economy.
---Lorenzo Fioramonti is Jean Monnet Chair in Regional Integration and Governance Studies at the University of Pretoria; Senior Fellow at the Centre for Social Investment, University of Heidelberg; author of several books on international political economy including Gross Domestic Problem: The Politics Behind the World’s Most Powerful Number.
The practice of conservation biology has a palpably futile feeling when economic growth is the summum bonum. Supply Shock provides an antidote. All who are serious about the big picture of biodiversity conservation should read this book. It will change your idea of what the future can be, and how to create that future.
---Paul Beier, president, Society for Conservation Biology, and Regents' Professor, School of Forestry, Northern Arizona University
In Supply Shock, Brian Czech graphically shows how the growth-based status quo is destroying the ecological basis of human existence and eloquently describes an alternative path to true economic maturity.
---Bill Rees, author of Our Ecological Footprint, Professor Emeritus of Human Ecology and Ecological Economics, University of British Columbia, and co-winner of the 2012 Boulding Prize in Ecological Economics
As Brian Czech lucidly explains, it's time for our economy to start acting like a responsible adult in a world of limits. This book reeks of sanity: read it!
---Richard Heinberg, author, The End of Growth
Dr. Czech seems to be one of the few economists with the courage to stand tall and point out the scientific reality that perpetual economic growth is impossible.
---Jack Davis, retired CIA Executive Officer
From the Back Cover
THE STEADY STATE REVOLUTION — NAVIGATING THE END OF ECONOMIC GROWTH
Supply Shock clearly describes the heart of what ails us—a zombie-like addiction to economic growth everywhere at all costs. Brian Czech brilliantly dissects the economic theories, models, and mindsets that are diminishing the human prospect while calling it “progress”. … King Midas would have understood the point, as we will someday.
— David W. Orr, Paul Sears Distinguished Professor of Environmental Studies and Politics, and Senior Adviser to the President, Oberlin College
… it’s evident that Czech has mastered the art of melding science, economics,
policy and politics in one readable piece. Supply Shock belongs in the classroom, boardroom, town halls and policy circles.
— Herman Daly, from the foreword
Politicians , economists , and Wall Street would have us believe that limitless expansion is the Holy Grail, and that there is no conflict between growing the economy and protecting the environment. Supply Shock debunks this widely accepted myth, leaving no doubt that the biggest idea of the 20th century – economic growth – has now become the biggest problem of the 21st.
Starting with a refreshingly accessible, comprehensive critique of “the dismal science”, author Brian Czech develops a compelling argument for a steady state economy. Whereas many works of economic thought can be dry and boring, Supply Shock succeeds at engaging readers while conveying keen scientific, economic and political insights including:
The “trophic theory of money”
The overlooked source of technological progress that prevents
us from reconciling growth and environmental protection
Bold yet practical policy objectives designed to ease the transition
to life after growth.
Required reading for anyone concerned about the world our children and grandchildren will inherit, this landmark work lays a solid foundation for a new economic model, perhaps in time for preventing global catastrophes; certainly in time to mitigate the damage. Czech’s vision of “steady statesmanship” is impressive and convincing, and this book easily qualifies as one of the key manuals for those who care about the world and its inhabitants.
— Lynn Gree nwalt, former director, U.S. Fish and Wildlife Service
An old economic world is dying, and a new economic world is being born.
Brian Czech is one of the visionaries…
— Governor Rich ard D. Lamm
Brian Czech is the founder of Center for the Advancement of the Steady State Economy (CASSE), the leading organization promoting the transition from unsustainable growth to a new economic paradigm.
About the Author
Brian Czech is the founder of Center for the Advancement of the Steady State Economy (CASSE), the leading organization promoting the transition from unsustainable growth to a new economic paradigm. CASSE was named the Best Green Think Tank of 2011 by Treehugger. Brian’s background is in ecology, conservation biology, and economics, and together with colleagues from several professional scientific societies, he crafted a position statement on economic growth that has been signed by nearly 10,000 individuals and endorsed by hundreds of progressive organizations.
Herman Daly was a senior economist with the World Bank in the 1980’s and 90’s. He has served on the boards of directors of numerous environmental organizations, and is a cofounder and associate editor of the journal Ecological Economics. He is the author of many articles about economic development as it relates to population, resources and the environment, as well as numerous books, including Toward a Steady-State Economy, Beyond Growth, and Steady-State Economics.
Most helpful customer reviews
18 of 18 people found the following review helpful.
A critically important book that deserves a wide readership
By Dennis Littrell
This is a book about ecological economics and the need for a steady state economy. In part it is a follow-up to and an expansion on Czech's "Shoveling Fuel for a Runaway Train" from 2000. (See my review at Amazon.) I can say that whatever your level of expertise and experience in economics, you do not want to miss this book. It is a very well informed and thought-provoking read on a subject of crucial importance in the world today.
Czech's qualifications for taking on the formidable task of researching and writing this book are excellent. He is an ecologist and an economist and a very bright guy who writes well. His obvious purpose in this book is to demonstrate beyond any reasonable doubt that we can no longer blindly pursue economic growth at the expense of the environment. He especially wants us to understand that the idea (held by some economists) of unlimited growth is basically a fraud and a Ponzi scheme on our grandkids. Czech calls it "the myth of perpetual economic growth." (p. 251).
To make his case Czech gives a detailed history of the idea of both growth economics (mainly neoclassical growth theory) and steady state economics. In chapters three through five he discusses mainstream economic ideas from the eighteenth to the early part of the twentieth century. He compares the ideas of people like Henry George, Karl Marx, Francois Quesnay, John Stuart Mill, Adam Smith, Alfred Marshall, David Ricardo, Thomas Malthus and others, and how their ideas developed and affected policy. By the way, Mill advocated a "stationary" economic state and Czech has a nice long quote from Mill on pages 68-69 to document it.
In Chapter 9: "What Have You Done for Growth" Czech recounts the economic history following World War I up to the present time. The other chapters of the book are devoted directly to his thesis: the dire need for steady state economics in a "full world."
I recommend that most readers, who are interested in Czech's delineation of what ecological economics is all about and why it must replace neoclassical growth economics, skip the historical chapters 3-5 and most of 9 (except for the end where Czech lectures Obama on his failure to understand the need for a steady state economy) and concentrate on the other chapters. However for other readers, for whom the historical economic context might more interesting, I recommend reading the book straight through as written. Clearly Czech, his editors and publisher believe that the historical background is necessary for readers to understand Czech's argument, even prerequisite to that understanding.
Some observations and comments:
The main problem with neoclassical growth theory is that the ecosystem isn't included in their calculations. Neoclassical economists have somehow forgotten that all wealth ultimately comes from agriculture, i.e., the "trophic" basis of wealth. This has always been the case. Without surplus grain no civilization could have developed; no farmer could become an artist or a craftsman, and no financers or economists could even be imagined.
The reason that unlimited growth is impossible is that eventually all the land is taken up and there is no room to grow crops or raise livestock. Some economists then say that human ingenuity will find a way, but Czech points out (with devastating effect on their pipe dreams) that standing in their way are the first and second laws of thermodynamics. (See in particular Chapter 7.) Obviously the planet can carry only so many people. If you run out of nonrenewable resources you can't get something from nothing. Furthermore in any food chain there is a loss of energy as one goes up the chain. One thousand rabbits may feed 100 foxes (paraphrasing Czech) but 100 foxes will feed only 10 eagles. We can never get 100% efficiency from our food supply or use the sun and the green plants of the world with 100% efficiency.
But some economists might counter that oh well that's a long way off. The really terrible thing is that "the best available ecological foot printing research indicates that we use the equivalent of approximately 1.5 Earths to provide our resources and absorb our pollutants. In other words, it now takes the Earth one year and six months to regenerate what we use in a year." (p. 186) That is not only not sustainable, at that rate the catastrophe will be upon us in as soon as a decade or two when the water and food riots begin and the US goes into a Fortress America mode with the suspension of civil rights under a totalitarian regime.
No, I am not joking and neither is Czech. The very idea of the unlimited, unsustainable economic growth that is ravaging this planet being some kind of standard economic wisdom makes us understand why economics is called the dismal science. But today's unlimited growth economists make me want to call economics not dismal but willfully myopic. Who do they think they are kidding besides themselves? And who has stacked the econ establishment deck at our universities with these clowns? And why?
Czech lets us know who historically. He recalls Henry George (1839-1893) who believed that the only fair and proper tax was a land tax. Oops. That kind of thing ran afoul of none other than John D. Rockefeller who used his money, power and influence to see that our universities were stocked with economists who believed otherwise. (See page 92.)
Today little has changed apparently. Czech quotes William Nordhaus, Sterling Professor of Economics at Yale University as saying, "Agriculture, the part of the economy that is sensitive to climate change, accounts for just 3% of national output. That means that there is no way to get a very large effect on the US economy." (p. 183)
This howler is nearly identical to something said by Thomas C. Schelling, a past professor of economics at Harvard, past president of the American Economic Association and 2005 Nobel laureate. (See page 183.)
How can these august economists be so clueless? Possibly because they have had little to no training in ecology or physics? If they had had some training they might realize that the human economy "is but one subsystem functioning within the ecosystem at large." (Quoting Herman E. Daly.) Or they might realize that the human economy is a subsection of the planet's economy. Czech adds, "We could even argue that it is the ecosystem from which the money flows (and we will, in the next chapter)." (p. 157)
Czech doesn't think the steady state economy should be something that divides liberals and conservatives. He makes the point that conservatives should be for conserving the environment and not be in favor of "a pro-growth, transform-the-world-into-plastic agenda." (p. 252)
Finally here's something I didn't know that is slightly beside the point but still worth noting: Millions of tons of chlorofluorocarbons (CFCs) "will not enter the stratosphere until the latter half of the 21st century, at which time some 7 to 13 percent of the ozone will be destroyed--`enough ozone depletion to seriously alter life on earth.'" Czech is quoting Sharon Roan from her book, "Ozone Crisis" (1989).
The real shock is how bad it already is and that virtually nobody in a position of power has a clue.
--Dennis Littrell, author of "The World Is Not as We Think It Is"
6 of 6 people found the following review helpful.
Best book on the economy and sustainability
By Peter Withrop
This is the best book I have read on the economy and sustainability. It starts out describing how we have probably gone past the capacity of earth to support the economy. Lots of books talk about limits to growth, but this one puts the pieces together one by one with water, oil, farmland, and so on, going from the grocery stores out to the manufacturing sectors, and up into the information economy.
Another thing that sets this book apart is that it provides a very complete definition and description of economic growth and especially how it is measured and accounted for by a country like the United States. I thought this part might be boring but it was pretty interesting. While reading this chapter I suddenly was able to make sense of what I have heard on the news over the years about GDP numbers, the stock market and so on. That leads to the part about the history of economics and especially how economists have changed over the centuries, going back before Adam Smith even, with how they think about economic growth. It's interesting how corruption got into the economics departments at the universities. It makes sense too. The part about how land and natural resources was deleted from the production equation for political reasons explains why economists today seem to think everything will be fine as long as we keep spending more money!
The hardest part of the book to understand is in the next part. The parts about ecology and early civilisations are intriguing and very insightful. The part about trophic levels and how money got going makes more sense than most economics textbooks. This part really shows how green growth was such a scam. But it is a challenge to follow the part about technology. I read most of it twice and finally got it. You can't have economic growth, on and on, and have a good environment because the new technology for more economic growth came from more and more activity with the old technology. Now that your at the next level, you have to use more and more of the newer technology and some of the older technology to come up with the next round. All along it keeps eating away at the environment. It's like a catch 22 as the author describes it, and there is no way out of it unless you stop economic growth. If you are one of those people who thinks we can have more an more growth with no harm to the planet, read that part carefully.
The rest of the book was encouraging to me because it is about politics and the real world of policy, not just in the United States but also in the rest of the world. No matter what happens in the US, there is hope that a global movement will form around building a steady-state economy for the planet, one country at a time. There are some great ideas for policies toward the end to help achieve that, too. Policies and social movements.
This is one of the best books I have read and I highly recommend it. It is definitely the kind of book we need in these times with things like global warming and financial collapses. I hope the politicians read it too. Politicians and anyone else who is all for more and more economic growth.
5 of 5 people found the following review helpful.
A significant contribution to economic theory
By Michael Lewis
Brian Czech’s Supply Shock, Economic Growth at the Crossroads and the Steady State Solution, 2013, New Society Publishers, brings the “dismal science” to life as a luminous discipline. Czech begins where Herman Daly’s 1996 Beyond Growth leaves off, bringing ecological economics into the present turbulent economy while explaining how we got here.
In addition to an enlightening and enjoyable history of economics, and projections for the economic future, Czech makes two significant contributions to our understanding of steady state ecological economics.
Czech tells us the story of Henry George, whose 1897 Progress and Poverty, brought land back into the equation of the means of production, alongside capital and labor. George promoted the idea of a single land tax, thus fostering the enmity of industrialists of the time who were busy locking up land along the expanding railroads for their personal profits. George’s work not only encouraged the burgeoning agrarian and socialist political movements, but also engendered the reactionary slide from classical to neoclassical economics.
Czech’s explication of this largely forgotten economic history tells us that our present economic system is not carved in stone, and that we can indeed craft a new economic system more in keeping with modern realities of a finite, fully populated world.
Czech’s important contribution to ecological economics is his trophic model of human economies. Just as non-human economies can be organized on trophic levels, based on their relationships to primary producers (those who directly transfer energy from the sun to nutritional needs), human economies can be organized on trophic levels, based on their relationship to human primary producers (farmers and those who produce directly from the land).
The importance of this model lies in its explanation of production within our modern services and information economies, which professes to have a smaller impact on the environment because they exploit fewer resources and produce less waste than manufacturing economies. Czech points out that, just as large fierce animals are rare in non-human economies because they require a very large base of primary producers, service and information economies require a large base of primary producers (farmers) creating an excess of produce for its support. In an economic growth scenario, the expanding secondary production economy requires an expanding base of primary producers from a land and resource base that is constantly shrinking.
Therefore, continued net economic growth in a world of finite resources is impossible.
Czech’s trophic model of human economies firmly marries economic theory with ecological theory, exploring human economies as a subset of the broader natural economy, leading the way to a unified theory of steady a state economy that can function in perpetuity within natural cycles of resource availability.
Supply Shock is a significant contribution to economic theory that offers a path through and beyond the inevitable limitations of economic growth.
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