Going Steady with Herman Daly: ‘There are limits to everything’

Herman Daly was a founding father of ecological economics: more than half a century ago, he warned that the pursuit of endless economic growth was driving ecological collapse and harming society, as well as harming society - and came up with a plan to unbreak our economy. 

Dismissed by mainstream economists, pushed out of the World Bank, and even targeted by menacing, anonymous threats, Daly paid a high price for challenging our unsustainable global system. But now, as climate breakdown accelerates and the failures of neoliberalism become increasingly apparent, his ideas are more relevant - and more vital - than ever. Now is the time for his theories and his legacy to get the attention they deserve. 

In the opening episode, we hear from the person who knew his story best: himself. Featuring never-heard-before interviews with Herman, alongside reflections from a whole host of experts, scholars and collaborators. We trace his childhood battle with polio, his whirlwind romance with his wife, Marcia and the moment Herman discovered the first piece of the puzzle in solving the intertwined economic, societal and climate crises: the concept of uneconomic growth.

Featured in this episode:

Peter Victor, Professor emeritus of ecological economics and author of Herman Daly’s Economics for a Full World.

Gaya Herrington, Wellbeing economist & thought leader.

Joshua Farley, Professor of ecological economics.

Katherine Trebeck, Political Economist & writer.

Denis (Deni) Lynn Daly Heyck, Professor Emeritus of Spanish Language and Literature and Herman’s sister.

Terri Daly Stewart, Senior Occupational Therapist, and Herman and Marcia’s elder daughter.

Karen Daly Junker, Senior Manager of Provenance Research at the Virginia Museum of Fine Arts, and Herman and Marcia’s younger daughter.

Thank you to the Daly family for their generous support in sharing Herman’s story, and to Barbara Barros for voicing Marcia Daly’s email in this episode. Thank you also to our series consultants, Peter Harnik, Rob Dietz, and Peter Victor, who also graciously supplied the interview tape with Herman Daly, recorded in 2022.

CORRECTION: Herman Daly was born in Houston, Texas, not Beaumont (but he did grow up in Beaumont from a young age.)

If you want to learn more about the Journal of City Climate Policy and Economy, please visit our website: https://jccpe.utpjournals.press/

Cities 1.5 is produced by the University of Toronto Press and Cities 1.5 is supported by C40 Cities and the C40 Centre for City Climate Policy and Economy. You can sign up to the Centre newsletter here. https://thecentre.substack.com/

Cities 1.5 is hosted by David Miller.

Our executive producers are Peggy Whitfield and Chiara Morfeo.

Produced by Jess Schmidt: https://jessdoespodcasting.com/

Edited by Morgane Chambrin: https://www.morganechambrin.com/

Music is by Lorna Gilfedder: https://origamipodcastservices.com/

Transcript

[Steady with Herman Daly theme music]

Herman Daly 00:05 

It is just in the nature of human beings to always find a technical solution, and we will—we’ve done in the past. We’ll do it in the future. The major solution to all of our problems has been growth. Unemployment, well, Keynes’ solution was growth, unequal distribution, poverty, “Oh, we’ve got to grow because distribution’s too hard.” So, every problem, the solution is growth. When I say uneconomic growth, the growth the way we’ve been considering it costs more than it’s worth, so it’s uneconomic growth, so it’s not economic growth. Things ought to be economic. I’m an economist. I believe that there are costs and benefits and we ought to pay attention to both. [theme music ends]

David 01:03

[fast rhythmic music] You’re listening to going Steady with Herman Daly: How to Unbreak the Economy (and the Planet), a special Cities 1.5 miniseries about the life, ideas and legacy of the father of ecological economics. We live in an age defined by planetary crisis, climate breakdown, a rising inequality, extreme weather events, the destruction of biodiversity. But these are not natural disasters. They’re the outcomes of a global economic system powered by fossil fuel extraction and designed without regard for ecological limits. For nearly 50 years, neoliberalism has been the dominant policy paradigm. The belief that free markets, deregulation and infinite economic growth will deliver prosperity and stability. In reality, this is an impossible dream on a planet with finite resources.

While capitalism undoubtedly aided human development, this progress has come with a heavy price tag. At first, it was the violent exploitation of indigenous people, the Global South, and the working class communities of the Global North, but now it’s impacting everyone. While the wealth of the billionaire class grows exponentially, the rest of us suffer under an economic system that’s delivered instability, ecological degradation, climate disaster, and a very uncertain future, especially for younger generations. [music continues then ends]

Joshua Farley 02:48

Mainstream economists, they have this basic assumption that the economy will continue to grow forever, and if we do anything now to reduce climate change we’ll be sacrificing our wellbeing for a richer future. And why would we do that? You know, why should the less wealthy generation do anything for the wealthier future because the mainstream economists have this view that no matter what happens the economy will continue to inexorably grow indefinitely?

David 03:24 

[jazz music] If we don’t change course, we won’t just fail to solve the climate crisis, we’ll accelerate it. As the impacts of neoliberalism worsen, inequality will deepen, and political polarization will increase. The failures of our economic system are already creating fertile ground for dangerous and authoritarian political movements whose ideologies will lead to immense human and planetary suffering. Measures like cuts to climate initiatives, exploitative global trade agreements, and the championing of the fossil fuel industry all underpin a dying economic order. Future generations will face more and more disasters, both economic and environmental. Our economy treats the biosphere as a servant to the market, but it should be and needs to be the other way around. After all, this was how the 300 millennia of human history was able to be sustained. [music continues then ends]

Gaya Herrington 04:08

We have grown up in this society where we have seen growth being put as synonymous with prosperity and improving human wellbeing. We’ve been sold this trade-off between the environment and social benefits, and that is a notion that is—first of all, is wrong, it’s also relatively new in history. It’s important to realize that we sometimes assume that this has always been the case. If you look a little bit further, so before any of us were born and long before that, throughout most of human history the notion of perpetual growth as the ultimate goal was considered absolutely foolish, if not downright immoral. It’s very clear. So, that’s important to keep in mind. This notion of perpetual growth is actually historically an aberration. Not the proposal of maybe letting go of growth. It’s the ultimate pursuit.

David 05:02

[jazz music] It can be easy to dismiss these ideas as unrealistic or the daydreams of environmental protestors, but they’ve been percolating for more than half a century. And there was at least one economist who saw all of this coming, who refused to support the belief system that the health and wealth of our planet and those who live on it is separate from our economy. His name was Herman Daly. [music continues then ends] 

Herman Daly 05:39

The question is, does growth at the current margin make us richer or more wealthy? Is it actually making us less wealthy? It’s not that radical. I mean, you don’t want to get poor. It’s not preaching hairshirt and ashes, and things like that. It’s just saying, “Don’t make yourself poorer by pursuing this idea of growth after it is costing you more than it’s worth.”

David 06:09

[jazz music] Now, you might be asking yourself, “Why is a podcast dedicated to cities and climate talking about a relatively unknown American economist, at least relatively unknown outside of academic circles?” Simply put, Herman’s insight that our economic system is not independent from our physical planet is a powerful and relevant explanation of the forces that have led to climate change. And as we've explored through five seasons of Cities 1.5, urban environments are the perfect testing beds to trial alternatives to the current economic orthodoxy: neoliberalism. Ultimately, we need to figure out a new way forward, and cities are setting the stage for an actionable, greener, and more equitable tomorrow - which will in turn make for a more sustainable future worldwide. Who was Herman Daly and what role did he play, and in fact is still playing, in the mission to stop climate breakdown? [music ends]

[energetic music] Well, that’s what we’ll be exploring over the next five episodes. But for now, the short version is that he was an incredibly insightful economist well ahead of his time. Herman’s ideas were considered so radical that he received threats of violence, and he was arguably canceled by economic elites, including the World Bank. Yet today, he’s remembered as an award-winning economist who’s credited with inspiring ecological, wellbeing and degrowth economists, activists, concerned citizens and many more. Herman is a fascinating person and his life story equally so. But it’s his clear thinking about economics and the way that his ideas are continuing to shape the growing opposition to unbridled neoliberal economics that is his enduring legacy. [music ends]

Herman Daly 07:56

I’m sort of more willing than most people, I think, to be contrary. To go against the stream. Maybe that’s a character trait. Anger is a flaw. I get angry. Even if I sort of manage to stifle it, I would rather not. Because that clouds your thinking when you’re angry.

David 08:16

[jazz music] Herman saw the flaws in our traditional economic theories and powerfully argued for a different way of thinking, restructuring our systems to include the crucial pieces of people and planet. His ideas are so compelling, in fact, that it’s not uncommon for those who encounter them to experience a kind of epiphany. We’ll be hearing from brilliant economists around the world on their own Herman Daly light-bulb moments throughout this series. But for now, let me tell you about mine. [music ends]

[rousing music] I’ve always been interested in economics, and even studied it in university. I was raised in a small farming village in England in the 1960s and saw firsthand how economic systems can shape, help and limit the life choices that people have, depending on what social class they were born into. I first encountered Herman Daly’s ideas about 15 years ago when I was the mayor of Toronto, at a book launch from the ecological economist, Peter Victor, who’s also my neighbor. Peter’s work has been deeply informed by Herman. He would also later become his biographer.

Peter Victor 09:38

Yes, I’m Peter Victor. I’m a professor emeritus at York University.

David 09:45

You’ll hear from him in this episode and throughout the rest of this series. In this book, Managing without Growth, he spoke about how our collective goal should be prosperity, not growth. It was revolutionary to me. Years later, I approached Herman to work with us on the first ecological economics issue of the Journal of City Climate Policy and Economy. I got to experience Herman’s Southern hospitality firsthand as we worked on the call for papers together. Unfortunately, he passed away during this process. I only got to meet him properly once, but meeting him in person was a delight. He was so charming, but firm in his views unless you had a truly compelling argument. Herman understood so clearly something many economists still avoid, that the economy is embedded in the physical world, and that there are non-negotiable biophysical limits that we ignore at our peril.

This episode, the first of five, is the beginning of Herman’s story. A story of resistance against elite economic orthodoxy, it’s a tale of ideas ahead of their time and whose time has surely now come. It’s a love story and a story about family, but most of all it’s a history of a life committed to imagining what a truly sustainable economy could be. It’s a living legacy that the father of ecological economics has left for us all to create a better world. [music ends]

[fast rhythmic music] Herman Daly was born on July 21st, 1938 in Beaumont, Texas. Both United States of America and the rest of the world were stumbling out of the Great Depression, and unknowingly had entered into what would become a horrific second global war. This was the shifting world in which Herman grew up. He wasn’t yet a groundbreaking economist, a loving husband or a father. Before all of that, he was the son of Edward and Mildred Daly, and big brother to Denis Lynn. [music ends]

Denis Lynn Daly Heyck 12:09

My name is Denis Lynn Daly Heyck. I’m a professor emerita from Loyola University. Everybody always called me Deni. Some people called me Deni Lynn when I was growing up in Texas [laughs] but mostly it’s just Deni now. I loved being with Herman. I didn’t really know him when he was a little boy because there’s, you know, a five-year difference in our ages. But he was always a very kind and patient brother who would talk to me, you know. [chuckles].

We loved music. Both of us, we loved country music. You know, the original Hank Williams Sr., he was very popular in Texas, people like Lefty Frizzell, underappreciated, I might say. And so, we would listen to the radio together and that was fun. We did that as an activity together, and we would listen to the Mexican radio stations too. I remember we would sing the commercials in Spanish. And I remember listening to Elvis’ great Sun recording of That’s All right, Mama, and so that was really a fun thing. And the other thing I can remember was that we would always talk about things. We had lots of conversations. We always had dinner together as a family. And whatever was happening in our lives, we talked about, and that was very important. Because you learn to express yourself, express your views, and kind of relate your own experiences, consider them worthy of being talked about by the family at the table. And so, that was a very good experience that the four of us shared.

Herman Daly 13:55

I suppose the values I learned from my parents were the values that they had learned from the Depression, which was, “Don’t waste your money. Think about the future,” and these kinds of prudential things that to them were key. “Nobody’s going to give you anything. You’re going to have to do it yourself.”

David 14:19

[fast rhythmic music] Herman grew up in a segregated world, but despite the racism of Texas and the US more generally, he rejected this doctrine wholeheartedly. [music ends]

Herman Daly 14:32

I just realized at a very early age that that was wrong. A Sunday school flaw, “Jesus loves the little children, red and yellow, black and white.” When you look out at the world and you say, “Hey, well, why can’t I play with the Black kids?” You know, I could see that this was really weird. Something’s wrong there.

David 14:52

[fast rhythmic music] Herman was exposed to and embraced people from a wide variety of cultures and backgrounds. This was, at least in part, due to his job at his father’s hardware store. [music ends]

Herman Daly 15:05

A large part of my education, in the broad sense of education, came through working in my father’s hardware store. From an early age, I would ride into Houston with him and I would work Saturday at the store. And I was—you know, I was only 11, I guess, at the time. It was a good education because it brought me into contact with all kinds of people. You know, there was the maintenance man from Temple Beth Israel, and he was a Polish Jew. You know, he’d come in. And then there was a maintenance guy from the Houston Art Museum. I sort of tried to make friends with these people. And then of course, there were a large number of Mexican and Central Americans who would come in and I would make friends with them.

David 15:51

[fast rhythmic music] But young Herman’s life would change forever when he contracted polio. [music ends]

Herman Daly 15:57

I was part of the epidemic of that period. The polio vaccine came along in ‘55 and this was, you know, in the early 40s. People were very afraid of it and they would close down swimming pools, close down movie theaters and everything to try to avoid contagion. And, of course, they had no idea of what the real ideology was. We happened to be on a trip to visit my grandmother and cousins, and that night I had sort of a crick in my neck and in my arm, you know, and just sort of bothered me a little bit. And when I woke up in the morning, you know, I couldn’t move my arm and I was really stiff everywhere else and had a very high fever. And so I said, “Oh my God! What’s this?” I just remember thinking—sort of deliriously, you know, thinking, “Well, I’m probably going to die.”

I guess I was probably a total of maybe two months in the hospital—six weeks to two months, something like that. During that period, you know, I guess, you know, my parents and my grandmother, they would come and visit, usually on weekends, and I would be there during the week by myself.

So, my constant companion was the radio, particularly the comedy shows. [radio static] I started remembering all the jokes, you know, so I got a reputation as a funny kid. And then the hospital was—as I say, was pretty full and they had these big iron lungs, and they didn’t have space, so those were in the corridor. So all day long and all night, you could hear the [iron lungs whooshing] swoosh, swoosh. You know, they were just strapped in this thing with their head looking up at the ceiling, and they had a mirror—a 45 degree mirror, you know, above their eyes. And if you talked to them, you stood behind them, you know, so they would see you. And so, those were the people that really had it tough. They decided, “Well, okay, we’ve done everything we can for you. You know, go home and continue life and do what you can.”

David 19:32

[slow rhythmic music] The loss of his arm had a profound impact on Herman’s life. It limited some of the activities he loved to do as a child, such as swimming. It also left him with long-term health impacts, including intermittent and pain flareups, which continued to worsen as he got older. Here’s Herman’s sister Deni. [music continues then ends]

Denis Lynn Daly Heyck 19:55

What I think Herman knew from all of that polio experience at that time in the hospital was that he was very lucky. He was very fortunate. He right then, I think, learned to live within the limits of what he had been given. He decided not to think about all the things that he can’t do, which were legion, right? But to think of all the things that he could do now. And I think that’s what, as the years went on and the ultimately unsuccessful treatments out of the hospital but in doctor’s offices and things like that, led him to realize that you cannot regenerate life in a neurologically dead limb. And it was withered, and it was a nuisance. Actually, he talked to dad about it, that he wanted to do the amputation. And I remember dad said, “Well, you think about it for two months and then we’ll inquire with a number of doctors and experts, if you decide to do it, and then we’ll take it from there.” But it was his decision, and it was definitely a liberation for all of those reasons.

David 21:04

[rousing music] Herman’s fight with polio forced him to confront his limitations, but he also showed tremendous ability in adapting which allowed him to live a full and happy life. It’s perhaps this early understanding of limits that paved the way for his groundbreaking achievements as an economist.

Despite the segregation of the time, Herman’s parents encouraged both their children to get to know people regardless of skin color, ethnicity, or background. This helped to ignite an early fascination with Latin American culture, which saw Herman take a road trip to Mexico in his late teens. [music continues then ends]

Herman Daly 21:47

We drove all the way from Houston down to Acapulco, Mexico. Two 18-year-old guys, you know. It was an adventure, but we had a good time. My trip to Mexico and everything had really got me into the idea that it would be a good thing to eliminate poverty.

David 22:10

[rousing music] That trip ended up having a profound impact on his worldview. But happily, there was also time for things like fishing.

Denis Lynn Daly Heyck 22:22

Herman had always wanted to go fishing, deep sea fishing, and dad had said, “Oh, I don’t think you really want to do that.” But Herman said, “Yeah, I really do.” So anyway, when he and Bobby finally arrived in Acapulco they said, “Hey, let’s go deep sea fishing.” [chuckles] And so, they did and landed a big fish that, there’s a photo of it, which they then, I think, gave to a restaurant or something, but this big, wonderful fish. And I remember Herman saying later, “You know, dad was right.” He said, “I really wanted to catch that fish and then afterwards I was really sorry that I did. They’re much too beautiful to catch,” and that’s what dad had told him.

David 23:07

[rousing music] Despite his hardships, Herman’s early life was relatively happy. The same cannot be said for the world he lived in. The period Herman grew up in was one of profound change. At the end of the global devastation wrought by World War II, the United States of America merged as the epicenter of a new global economic order, one centered on consumption, extraction and growth. The world needed saving and it seemed that technological advance was the solution they’d been looking for.

Joshua Farley 23:43

My name is Josh Farley. I’m a professor in the Department of Community Development and Applied Economics at the University of Vermont.

David 23:49

Here’s Herman’s fellow ecological economist, Josh Farley. You heard him already at the top of the episode. [music ends]

Joshua Farley 23:57

The basic idea is—it is this techno-utopianism ‘technology will provide all the answers’. Technology does have an amazing ability to develop substitutes for some scarce resources, but as Herman Daly points out, you know, there is no work without energy. You know, our current sources of energy are these finite stocks of fossil fuels that we can deplete as fast as we want, so what economists don’t seem to recognize is, all of economic theory arose at the same time as the fossil fuel economy. In fact, Adam Smith’s book, The Wealth of Nations, which you could kind of think of as launching modern economic theory, was written in 1776. That was the same year that James Watt got a patent on his improved steam engine, and steam engines at that time were used to pull water out of coal mines so you could mine coal. So, there’s never been a market economy without a fossil fuel economy and the fossil fuel economy has given us unbelievable amounts of energy that has allowed us to continually ramp up production for 200 years. And economists take this fact that over the 200 years we have managed to continually increase production, through inductive reasoning, and as I like to point out, my theory is that I’m immortal because I’ve woken up alive 22,000 days in a row, and so there’s zero evidence that I won’t wake up tomorrow. 22,000 data points saying I will be alive forever. That’s the way I look at economists’ views of this endless growth. Is they take a very brief period in human history and extrapolate from that to say that this system can go on forever.

David 25:36

[jazz music] Gross domestic product, or GDP, was developed in the 1930s by Simon Kuznets. At the height of the Great Depression the US government needed a better way to understand what was actually happening in the economy: how much was being produced, how fast it was growing, and where public spending might make a difference. Kuznets, a Russian American statistician, delivered exactly that. He designed a national income accounting system that could measure the total output of goods and services in dollar terms. It was a technical breakthrough and a political tool. GDP helped shape the New Deal, guided wartime mobilization, and eventually became the gold standard for economic performance worldwide.

Gaya Herrington 26:29

Gaya Herrington. I’m Vice President, Sustainability Research at Schneider Electric.

David 26:35

You already heard from internationally renowned economic thought leader Gaya Herrington briefly at the start of this episode, here she is again. [music ends]

Gaya Herrington 26:45

Capitalism got really turbocharged. As soon as we invented GDP, that’s when that happened, right? Kuznets said, “Well, we could do this,” and then he warned at the time, “Listen, this is not a good measure for wellbeing.” So the inventor of GDP himself said, “Don’t use this to measure wellbeing. It’s not a good indicator for prosperity,” and then the world just ran with it anyway.

David 27:06

Here’s Peter Victor.

Peter Victor 27:08

Gross domestic product is a measure in money terms of the goods and services produced in an economy. It doesn’t include all of the goods and services that are bought and sold, it only includes what we call the final goods and services. Think of making bread, the flour that is sold to the baker ends up in the bread, it’s only the purchase and sale of the bread that goes into gross domestic product. All of those intermediate purchases and sales that lead to the bread are not included. So, it’s a measure of the goods and services that, for ordinary people, we see that when we go shopping. In the shops we pay a price for the product, that’s counted in GDP. They don’t also count the value of the inputs into that product. Otherwise, GDP would be enormous and meaningless.

David 28:00

But figuring out how to measure the economy was just the first hurdle. The next big task was to figure out what to do with this information.

Peter Victor 28:10

The key man there was John Maynard Keynes in Britain, and what he did was realize that if the total level of expenditure on goods and services, what GDP measures, is deficient then you have high unemployment. And he came up with a solution to that. He said, “Well, the government should spend money. If the private sector is not spending enough, the government should spend it. Run a deficit, and then boost the economy. That will eventually lead to an increase in taxes and you’ll have some sort of balance again.” Well, now then comes the Second World War. The idea that you can now measure what an economy is producing and what it could potentially produce was really important to the allies, because it allowed the government to think in terms of, “Well, what’s the maximum we can get from the economy in order to fight and win the war?” After the Second World War, because of Keynes, because of the experience of the war, governments in many countries said, “We’ll now guarantee for employment for our workforce.” This was very new. Governments had not done that before. And so, again, the measurement of GDP was very important for actually implementing that policy. If you have got an expanding labor force, you’ve got to have an expanding GDP to employ them all.

David 29:28

GDP only became economic orthodoxy as a result of a series of meetings at the United Nations Monetary Financial Conference held in Bretton Woods, New Hampshire, in 1944. Later, this would be known simply as the Bretton Woods Conference, and it ultimately reshaped the economics of the world. It was the trailhead of the path we find ourselves on today.

Peter Victor 29:54

Representatives from 44 countries met—from the allied countries, to think about what needed to be done to avoid another Great Depression when the war was over. It was obvious that the expenditures of government were going to have to be cut back after fighting the war, what would happen? So, they came up with a scheme. They developed two major institutions, one is the International Monetary Fund, and the other is the World Bank, as it’s now known. The International Monetary Fund was set up to be able to lend to governments that found themselves have a serious trading deficit. The World Bank, the other institution, was set up to provide loans to low and middle income countries for the purposes of growth and development.

[jazz music] These were the institutions that were established at the Bretton Woods meeting.

David 30:52

Of the 730 delegates from 44 countries, only two of them were women, and neither held leadership roles at the conference. There was no consideration of the environment. Representatives from rich, industrialized and overwhelmingly Global North nations created a new global economic framework which put their interests front and center. The final institutions and rules which came out of the conference reflected this power imbalance, which would become a source of contention for decades to come. So, why exactly are these ideas no longer fit for purpose?

Peter Victor 31:45

Well, that’s exactly the right question to ask, in my view, and the answer is that, from an ecological economics point of view it’s fundamental that you start from a vision of the economy as being embedded in planetary systems. All of the materials that are used in the economy are ultimately originally drawn from nature, and there are other services that nature provides. Pollination, for example, it’s a service that’s provided to the human economy. Nobody pays for that, but we better make sure it’s protected otherwise we’re in big trouble. For most of the time that economists, say since Adam Smith in the 18th century were working, you could say in a way that the economy was small in relation to the planet on which it existed.

But now we’ve seen, over the last, at least, half century and maybe more, an increasing scale of the economy accompanied by increasing demands on the planet to supply these resources and to assimilate the wastes that now have created all sorts of stresses and strains on the system within which we live. So, if you keep running your economic policy solely or primarily in pursuit of economic growth, you lose sight of these inevitable repercussions for the larger system, and we see this now with wildfires, with flooding. Of course, climate change, with the accumulation of greenhouse gases in the atmosphere, largely coming from the combustion of fossil fuels, relates directly to the energy forms that we rely on to run the economy and to generate growth. So, GDP—maybe I’m unusual as an ecological economist. I wouldn’t trash it all together. I think that measure of the, now narrowly defined economic activity, it’s still relevant but it’s not relevant for running your whole economy. It’s just one of many, many other statistics that we should be looking at.

Gaya Herrington 34:08

I think that it goes back to the question, but isn’t growth always good? Isn’t it always progress? The only reason that politicians pursue it is because they say, “It’s good for the economy. It helps people. It creates jobs. Jobs is an important part of it.” I can see that. I can see that when there’s a recession, there’s real suffering. But on the other hand, why, despite all those years—especially in the richest countries in the world like the US, why then, after pursuing growth for decades, hasn’t, at least in those countries, poverty been eradicated? It’s actually stagnating. And why—even the winners in this system, like in Europe for example, why has happiness or life satisfaction been stagnating if not decreasing? And so, you come to the conclusion that, wait, sometimes growth does improve wellbeing, especially when the material footprint is low because it goes through real needs like housing and food. Obviously, that’s going to improve your wellbeing. And you just see very clearly in the data that once you get to a certain level, your needs are not going to be met anymore with that, because our needs can be satisfied. That’s the key difference between needs and wants. Once you’ve had enough to eat, you’ve had enough, right? And an extra cake is not going to do much anymore.

Joshua Farley 35:30

Yeah. So, this is really an interesting question. In my case, I think having a background of the natural sciences kind of inoculated me against believing, you know, the sketchy science of mainstream economics. Though Herman himself did not have an interdisciplinary background. Put it this way, he obviously was very widely read in ecology and everything else, so he was self-taught outside of economics. But there’s dozens of articles, actually, that ask why economists are as they are. Economists, they donate less to charity than any other discipline, they apparently tip less, the whole bunch of attributes where economists behave as mainstream economic theory says they should. And the question of these journal articles is often, “Is it because naturally selfish people go into economics, or because economics programs indoctrinate people and make them more selfish?”

I often refer, not to my doctorate, but to my indoctrination, and I watch students in the program, a lot of students, when we entered the PhD, questioned a lot of what we were taught. But what tended to happen is, students would either get frustrated and quit or they would actually change their worldviews. They would change their values to conform to this homo economicus. This rational, self-interested automaton, basically. So, the economics programs do change your behavior, and some research suggests that taking a single class in economics changes the way people behave.

David 37:55

[rousing music] The roadmap created at Bretton Woods was a blueprint that would enable decades of exponential growth for some of the world while solidifying inequality into its structures. With it came increasing greenhouse gas emissions and countless loss of biodiversity. [music ends]

[jazz music] So, where was Herman while all of this was going on? He too was watching with great interest as the Bretton Woods system was put into action around the globe. Because by 1960, Herman had started his bachelor’s degree at Rice University in Houston, Texas, where he would take his first courses in economics. [music ends]

Herman Daly 38:41

My first course in economics was history of economic thought, and I said, “Guys, you know, this is really something. It combines science and ethics and—you know, and sort of literary.” My problem with choosing a major was I liked science and I liked humanities, and I didn’t want to give up either one for the other. And this seemed to be economics then, at least as represented falsely by the history of economic thought, was a chance to combine both; you’d have one foot in the humanities and one foot in science. That, of course, was wrong because I later discovered, and you have, in my humble opinion, both feet in the air. And so in a sense, my sophomore mistake of majoring in economics became my mission in life, in a sense to try to put one foot in science and one foot in ethics and humanities, which somehow had gotten lost in modern economics. So, my mistake kind of lives on in an attempt to correct it, you know.

David 39:59

[rousing music] His focus on being transdisciplinary, studying and learning from a variety of fields continued throughout Herman’s life and career. After an initial grounding in economics, Herman then went on to Vanderbilt University in Nashville, Tennessee, for his master’s degree, and then his PhD. [music continues then ends]

Herman Daly 40:18

The reason I went to Vanderbilt was because they had a program in Latin American economic development, which was a good program, and my advisors at Rice knew about it and recommended it. Economic development at that time was kind of a new and important field in economics and it involved culture and broader things than just mathematical theory. And so, I liked that so that’s why I went to Vanderbilt.

David 40:48

[jazz music] Although he didn’t yet know it, Herman’s time at Vanderbilt was going to have a profound impact on his future, both as an economist and a person. It was here that Herman would begin working with Romanian statistician and economist Nicholas Georgescu-Roegen. Herman was already starting to question the idea that economic growth could or should go on forever, but it was at Vanderbilt that these doubts began to take shape, in part thanks to Georgescu-Roegen. Georgescu-Roegen was, by all accounts, a difficult man, and Herman was not the only one to endure a stormy professional relationship with him over the years. But Herman never lost respect for his colleague’s economic ideas. Georgescu-Roegen wasn’t your typical economist. He believed that most economic models were fundamentally flawed, they ignored the laws of physics. In particular, economic models didn’t take into account the second law of thermodynamics, which is the idea that energy degrades as it’s used. He saw the economy as a real physical process that uses up resources and produces waste, not just a set of abstract numbers or market flows. Here is Peter Victor. [music continues then ends]

Peter Victor 42:21

Georgescu-Roegen was Daly’s teacher and so he learnt the importance and the relevance of the law of entropy to economics from the master. But Daly also had the capacity, which I think his teacher lacked, to explain things in simple, easy to understand ways. That’s very important. And how did he use it? Well, in economics, it’s really quite simple. Entropy is a measure of disorder, and so when things are becoming more disorganized we say that entropy is increasing, and when we have something where it’s very organized then entropy is low. And so, when you think of an automobile running on fossil fuels, the energy in the fossil fuels is very organized. The chemical energy there, it’s very compact. And when it’s released in combustion to drive the car, the total quantity of energy stays the same but it has now become less organized and a lot of it emerges from the tailpipe as gases. Everybody knows you can’t take those gases and run them through the engine again to keep the engine going. And that’s because when entropy has increased, the energy loses its capacity to do work and it’s just a basic law of physics. That’s why we have to keep going back for more fossil fuels if we want to keep the engines running.

David 43:46

[slow rhythmic music] For Herman, this idea was transformative. The economy wasn’t floating above the planet, it was part of it. Dependent on it, limited by it. He once said that Georgescu-Roegen gave him a worldview. It was a completely new understanding of economics, one that brought nature and future generations back to the center of focus. It was the foundation for everything Daly would go on to challenge, from GDP to the World Bank, to the idea that more is always better. [music ends]

Herman Daly 44:23

I didn’t go there to study with him, though. I knew he was there. I knew he had a reputation as an important theorist. His work on entropy, I think, had really not hit the public at all by that time. It was coming into his lectures, but it wasn’t written. I went there to study, you know, Latin American economic development, but at that time they really took seriously the idea that a dissertation had to be something of a contribution in the sense that it could not have been done before. It had to be new. So, Uruguay, you know, a small country, sort of a progressive little country, Switzerland of South America they called it, I was interested in international trade and that was a big tool of their development policy. You know, I set that all in a context. In a broad context of the history of the Uruguayan economy, the general problem of growth in Uruguay, and specifically trade control.

David 45:24

Herman chose to do his dissertation on a niche area of Uruguayan economics. During his time spent there, he saw clearly that there are other ways to live and other things to value, aside from work and earning money.

Herman Daly 45:41

That’s what I learned from the Uruguayans. It’s smart to knock off at one o’clock and enjoy life.

David 45:46

[rousing music] But Herman also had a personal life, too. One fateful evening at Vanderbilt, Herman stopped by at a party in Nashville where he met a young Brazilian woman named Marcia. This chance meeting at a party led to a lifelong romance and friendship. Marcia’s recollections from this time are taken from an email that she wrote to Peter Victor and has been read by Barbara Barros, the Global Head of Adaptation Finance at C40, with permission from the family. [music ends]

Barbara Barros, voicing an email by Marcia Daly 48:31

In July of 1962 I had been in Nashville, Tennessee, for two years on a scholarship and I was almost ready to leave back to Brazil, when a friend of one of my professors invited me for a party. He asked me to please take my guitar and sing some Brazilian songs at the birthday party of his Vanderbilt history professor. He and his girlfriend came to pick me up at Scarritt College, where I was living and studying. I met Herman at the party later on and was invited to go out for the best fried chicken in the town on the coming Saturday with him. We kept seeing each other the next week almost every day, but I was getting ready to leave for Brazil so we had to say goodbye.

David 48:14

Marcia initially chalked this up as a fling. After all, an enormous distance separated them. But Herman had other ideas. Carving out time from his thesis research in Uruguay, he made a detour to Brazil.

Barbara Barros, voicing an email by Marcia Daly 48:31

Back in Rio de Janeiro around the beginning of March, 1963, I was in a meeting of teachers and workers at the Colegio Bennet when I was called to the front door as someone was looking for me.

Herman Daly 48:47

I had Marci’s address, and so I just showed up. [chuckles] She was amazed to see me. Anyway, I stayed there and we just kind of rekindled but I had to go on to Uruguay. I had to, you know, do what I was supposed to do, and so I did. And I went down and I collected all the information that was available relative to my dissertation on Uruguay and trade control and I said, “I don’t really need to be here,” so I went back and stayed—you know, got a little hotel room near her college, stayed there for—during the day I’d read, while she was working I’d work and read all of this, and then we’d get together enough. And so finally we decided, “Well, we’ll get married.” That was fast.

David 49:41

[rousing music] Herman and Marcia married in Montevideo, Uruguay, in 1963, and would welcome both their daughters into the world before the end of the decade. All told, this time period would end up being enormously influential in the rest of Herman’s personal and professional life. Working with Georgescu-Roegen and his formative period in Uruguay would fundamentally impact Herman’s worldview. The moral and academic convictions that he developed through this work, held strong by the support of his family are what helped him to stay steady in a fast shifting world. [music ends]

[fast rhythmic music] Mainstream economics is rooted in assumptions that were never designed to deal with ecological limits. It treats the environment as an externality. As if our planet were a circumstantial variable rather than the foundation of life itself. [music ends]

[jazz music] Daly’s work rejected the neoclassical view of the earth as separate from our economy. He argued that the economy is a subsystem of the earth’s systems, therefore, economic activity must respect the carrying capacity of the planet. He would later define the idea of ‘uneconomic growth’ as the point at which the environmental and social costs of growth outweigh its benefits. [music ends]

David 54:04

[jazz music] Herman instinctively knew that the world has limits. He called for an economy that works within planetary boundaries, one that creates and circulates value rather than a model which consumes the foundations of life. [music continues then ends]

Herman Daly 54:21

I didn’t really expect to—you know, to change the world. I did think it was a persuasive argument. How long that would take? You know, I guess at first I was a little more optimistic, and then as time went on and I began to see more of what—you know, what I’m suggesting, it really goes against very fundamental things. And so, I guess in terms of changing my mind, at first I thought those fundamental things were only economics; invested interest of making money in this and that. Later I began to see that it went much more deep culturally than that, and, in fact, even to a kind of religious commitment.

David 55:10

[jazz music] For years, Herman’s ideas were ignored or dismissed, but now, in the 21st century, the conversation has begun to shift in the wake of increasingly unstable climate and social conditions. Countries and regions have begun to explore alternatives to GDP, like Bhutan’s gross national happiness measurements and New Zealand’s wellbeing budgets. Here’s what Katherine Trebeck, a political economist and advocate for economic system change, said when I spoke to her on Cities 1.5 all the way back in season one. [music continues then ends]

Katherine Trebeck 55:52

Think of maybe a 3-year-old that you might know, a granddaughter or a grandson or a niece or a nephew or a son or a daughter, and just think about how they’re often asking, “But why? But why?” I think we need to be like that. We need to look at the high number of people, say, sleeping rough in Glasgow, look at the huge number of floods that have swept across South Australia, why there are places in the UK that are opening up warm banks alongside food banks because people can’t afford to keep pneumonia away. Quite literally, people are dying of pneumonia. Why more and more young people are lonely and scared for their future? Why people are in work but still in poverty and having to get top up wages if they’re lucky?

And so, when we see those sorts of examples that show us that business as usual is no longer delivering the way we need it to, if it ever did is a another conversation, and we channel our inner 3-year-old and we look upstream, we find ourselves facing the economy, and then we can think about, “Well, what sort of changes do we need?” And those changes are going to happen at the very, very local to how we design cities and local neighborhoods, through to national macro economies, right up to the global geopolitical economic infrastructure. And there’s a whole suite of changes that are needed, so it’s a little bit like a jigsaw puzzle: how we tax, how we subsidize, what sort of business models, how we purpose our economy, how we do our energy system, and so on and so on.

David 57:20

[jazz music] Many of the modern initiatives making the world a better place today stand on the intellectual foundations laid by Herman Daly. His insistence that we measure what matters, health, equity and protecting our planet, is now informing policies around the world. But Herman was also a person, a caring brother, a loving husband, and a patient father to his daughters Terri and Karen. [music continues then ends]

Denis Lynn Daly Heyck 57:50

I think one time someone said, kind of in a very critical way, I believe, to Herman, “Well, it’s highly unlikely that your ideas will ever take hold.” And he responded something like, “Yes, it is highly unlikely. But unlikely things do happen,” and they do.

Barbara Barros, voicing an email by Marcia Daly 58:13

Herman’s greatest virtues were that he was a religious person and a very intelligent and mature man. He was respectful and attentive, and an honest and courageous person. He approaches problems in a calm and collected manner. Always interested in what others thought; was very open, honest, and friendly.

Karen Daly Junker 58:39

He loved music, but he had a music teacher when he was very young, and the teacher said, “You know, Herman, you need to stop. You can’t sing,” or something. So, he kind of kept that in his head but when you really talked to him, like when—as, you know, as a musician myself, I would sit there and say, “La…” and he would go literally a perfect third above, “La…” and you’re like, “You’re harmonizing, dad, but you need to do la…,” and he’s like, “La…” and I’m like, “No, la…,” and, you know, he just couldn’t get it. But he could whistle on key.

Terri Daly Stewart 59:11

Oh, yeah, he whistled beautifully.

Karen Daly Junker 59:14

He whistled on pitch perfectly, so there you go.

Terri Daly Stewart 59:16

[slow rhythmic music] No, he—I think he was really, really proud that we were musical and that we could sing—

Karen Daly Junker 59:22

[laughs] Yeah, we would sing.

Terri Daly Stewart 59:26

—that we could actually sing. He was—I really do think he was, like, incredibly proud of that.

Karen Daly Junker 59:30

Yeah, he loved it. Yeah.

David 59:35

Herman Daly died in 2022, but his work has never been more alive. As the ecological breakdown accelerates, the steady-state economy he envisioned offers not just a critique but a pathway out of the economic, social, and ecological crises the world finds itself in. [music continues then ends]

[fast rhythmic music] Over the course of this miniseries, we will explore the influence of Latin America, especially Brazil, on Herman’s theories, the impact of his faith and values on his work, the threats made against him and his family, his tumultuous time at the World Bank, and how his ideas are gaining traction in cities across the globe today.

In our next episode, we dive into what a steady-state economy actually is. What does it mean to thrive without endless expansion and how can we build a system that protects both people and planet? [music continues then ends]

[jazz music] This has been Going Steady with Herman Daly, a special miniseries from the team at Cities 1.5. Special thanks must go to the Daly family for their support and generosity in telling Herman’s story.

I’m David Miller. I was the mayor of Toronto, Canada, and I know firsthand the role cities can play in solving the climate crisis. Currently, I’m the editor in chief of the Journal of City Climate Policy and Economy, published by the University of Toronto Press in collaboration with the C40 Center for City Climate Policy and Economy, where I’m also the managing director. C40’s mission is to help its member cities halve their emissions within a decade while improving equity, building resilience, and creating the conditions for everyone, everywhere to thrive.

Cities 1.5 is produced by the University of Toronto Press, in association with the Journal of City Climate Policy and Economy and C40 Cities.

This podcast is produced by Jessica Schmidt and edited by Morgane Chambrin. Our executive producers are Peggy Whitfield and Chiara Morfeo. Our music is by Lorna Gilfedder. The movement that Herman Daly started is still thriving today, and that’s welcomed news because its time has finally come. To learn more, visit the show’s website linked in the episode notes. See you next time. [music continues then stops]