Going Steady with Herman Daly: ‘For the common good’

We rejoin Herman Daly in the  late 1970s - a tumultuous time for our renegade economist.  Partnering with theologian John Cobb Jr., Daly began to rebuild economics from the ground up, reframing it around values, community, and the planet that sustains us.

Woven through this intellectual journey are stories of faith, family, and friendship that helped Daly persevere. We hear how he sparked a global community of scholars and inspired whole new movements, ranging from wellbeing and regenerative economics to the circular economy and doughnut economics.

Featured in this episode:

Gaya Herrington, Wellbeing economist & thought leader

Jennie King, Senior Fellow at ISD

Peter Victor, Ecological economist & author of Herman Daly’s Economics for a Full World

Sandrine Dixson-Declève, Global Ambassador for The Club of Rome

Robert Costanza, Ecological economist

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

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

Brian Czech, Executive Director of CASSE

Rob Dietz, Program Director at the Post-Carbon Institute and co-host of Crazy Town

Colvis Cavalcanti, Ecological economist

Katy Shields, Regenerative economist, and co-creator/host of Tipping Point

Katherine Trebeck, Political economist

Thank you to the Daly family for their generous support in sharing Herman’s story, and to Barbara Barros, C40 Global Head of Adaptation Finance, for voicing Marcia Daly’s email in this episode.

Thank you also to our series consultants and fact checkers, Peter Harnik, Rob Dietz, and Peter Victor, who also graciously supplied the interview tape with Herman Daly, recorded in 2022.

Visit the Cities 1.5 podcast page on UTP’s website for the media citations used in this episode.

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, Managing Director of the C40 Centre and author of the book Solved. It's written and produced by Peggy Whitfield and Jess Schmidt: https://jessdoespodcasting.com/

Our executive producer is Chiara Morfeo.

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

Cities 1.5 music is by Lorna Gilfedder: https://origamipodcastservices.com/

Transcript

[Going Steady with Herman Daly theme music]

Herman Daly 00:04

Well, there was the Cold War and the worry about bombs and nuclear attack that was in the background, but then, you know, the thought was everybody becomes sort wealthy and happy and they stopped fighting. I accepted the whole thing of growth. It seemed to be the obvious way to eliminate poverty, so I bought the whole thing. It was a youthful miscalculation. When I just had the realization that you can’t keep on growing, and it was obvious to me what the costs were, I said to myself, “Well, I can see this clearly. I have a lot of independent evidence that there are a lot of other people in the world who are smarter than I am. Why in the hell won’t other people see it too? Because I’m not an exceptionally bright person. Why wouldn’t other people see this?” And I guess it’s still an unexplained thing. You know, my instinct or reaction is, “Well, people don’t see it because of vested interests,” I guess that was my first thought. And then vested interests got broader into not only material but intellectual vested interests in the system, and then intellectual vested interests of an almost religious conviction of man’s capacity to create anything he wants. And so I guess that’s kind of where I’ve been driven to. To see it more and more in religious terms as a kind of—almost an idolatry. [music continues then ends]

David 01:49

[fast rhythmic music] Last episode, we left off in the late 1970s. I was in university then on a scholarship at Harvard studying economics and saw firsthand how civil rights and environmental movements from the previous decades provided fertile ground for alternative ways of living to flourish. But the economic events of the 70s also gave rise to a neoliberal revolution. Once again, the world sat at a crossroads. Here’s economic thought leader, Gaya Herrington. We last heard from Gaya in episode one. [music continues then ends]

Gaya Herrington 02:32

I wasn’t born at the time, but from what I can tell, the 70s could have been a real pivotal point, actually. They were experimenting. There were pilots on a universal basic income and those side of things, and then it went in a different direction clearly. But the Limits to Growth at the time was a best seller. Everybody talked about it, and for a moment it was really picked up by politicians as well. And then it went a different direction and it was very effectively buried, that’s why these days most people don’t know what Limits to Growth is, especially younger generation.

David 03:09

One of the key contributions that Gaya has made to the field of wellbeing economics is her update on the original 1972 Limits to Growth study. We’ll hear more about that later on in the series.

[slow rhythmic music] But let’s return to half a century ago. What went so wrong in the 1970s? Why did we miss our moment to do things differently? Well, unlike Gaya, I was alive then. I also studied economics at a time when the oil industry was booming, but the global economy itself was volatile. By this time, Big Oil was well aware that the burning of fossil fuels was damaging the planet, but it chose to cover this up to prevent its profits from being impacted. Here’s Jennie King. She’s a senior fellow at the Institute for Strategic Dialogue and one of the founders of the Climate Action Against Disinformation coalition. Jennie was a guest on season three of Cities 1.5. [music continues then ends]

Jennie King 04:13

The fossil fuel companies, I think, most people would now feel quite comfortable using the term ‘disinformation’ because there have been so many exposes and even hearings in US Congress, for example, that have shown how much these companies knew going back 50, 60 years, and how they actively sought not only to suppress the information that they themselves had commissioned, but then to counter that information and spread the exact opposite narratives among the general public.

David 04:45

[rousing music] Our reliance on fossil fuels wasn’t just harming our planet, it also had huge social and economic costs. While oil wealth didn’t directly fund the rise of neoliberalism, the oil price shocks of the 1970s, particularly the 1973 and 1979 crises, caused what’s known as stagflation. Many Western nations experienced this phenomenon characterized by high inflation and high unemployment, and this was also turbocharged by geopolitical considerations. Here’s ecological economist and Herman’s biographer Peter Victor. [music ends]

Peter Victor 05:30

Both the USA and the USSR thought that they had to have a bigger and bigger economy to pay for the arms race. So, what happened then was that instead of economic growth and growth of GDP becoming important for employment, it became the goal itself. “We need to be expanding GDP,” and we’ve never looked back from there, at least not in the mainstream. The increasing GDP is just considered a good thing because the richer you are as an economy, the more you can afford—you can pretty much solve any problem if you’ve got enough money to throw at it.

David 06:03

[jazz music] The prevailing policies at the time were heavily influenced by Keynesian economics. As Peter explained in episode one, Keynes proposed that if the private sector isn’t spending enough to make the economy grow, then the government should run a deficit to boost the economy. The idea was that the government would be able to make that deficit back through the increase in taxes that would correspond with the economic recovery, restoring balance to the system. But the Keynesian solution did not fix the stagflation crisis. Inflation was still trending up and so was unemployment, and now the government was in the red too. This loss of faith in government intervention prompted many to seek out alternative solutions. Economic turmoil created an environment where neoliberal ideas emphasizing free markets, deregulation and privatization were presented as the solution to restore economic stability and create more jobs. Political leaders like Margaret Thatcher and Ronald Reagan were influenced by neoliberal thinking and implemented policies that privatized industries and deregulated markets, all in the name of addressing the economic and unemployment crises. [music ends]

[rousing music] The volatility of the price of oil created the perfect storm for neoliberal policies to take hold. People were desperately looking for an answer, and they were willing to buy into any promising solution. Here’s Sandrine Dixson-Declève, a former co-president of the Club of Rome, a global think tank and advocacy group which commissioned the original Limits to Growth study. Sandrine was also a guest on Cities 1.5 back in season two. [music continues then ends]

Sandrine Dixson-Declève 08:00

The stakes are high and clearly the incumbents in an extractive economy, the politicians that tend to continue to follow neoliberal thinking and acting, short term profit-making, shareholder value and who don’t want to get out of the current economic paradigm, are holding on tight to what they know and what they feel is more important. It is embedded in the structures. At all levels of the structures. Whether we look at the over-financialization of our economy and the fact that productivity is directly linked now to transactional finance and shareholder value rather than the real economy. I mean, the fact that, for example, you don’t take into consideration in shareholder value 10,000 layoffs as a negative, it becomes a positive. I mean, your shares go up when you actually lay off people. It is absolutely shocking. So, we’re not taking into consideration the lives and livelihoods of most people on this planet.

David 09:00

[fast rhythmic music] Neoclassical economists embraced these arguments. This was partially out of fear of more global turmoil as it was marketed as an easy way out of a hard situation. But these ideas also appealed to those promised access to funding from big businesses such as those dominating the fossil fuel industry. The greedy bottom lines of what Herman called the ‘vested interests’, both the corporations themselves and the open pockets of their cheerleaders, were dependent upon the success of the ‘growth is good’ mantra. Here is Gaya Herrington again. [music continues then ends]

Gaya Herrington 09:42

It’s important to keep it nuanced, which means just saying, “Well, maybe perpetual growth is not the ultimate goal. It’s not ideal as the ultimate goal.” It doesn’t mean you’re anti-growth, it just means you’re more selective about it. What is this growth serving? Who actually benefits? Is it maybe the most disadvantaged communities or is it just, like, people who are actually already quite wealthy? That makes a difference. And so, that’s the kind of discussions that you have if you examine that growth pursuit a little bit more closely.

David 10:16

[rousing music] Academic, financial and institutional support for these neoliberal ideas solidified it as the dominant economic paradigm and further amplified its influence. This moment in history paved the pathway to social inequity and climate breakdown, the serious consequences of which we are reckoning with today.

Robert Costanza 10:37

So, I mean, just take the focus on GDP growth, you know, which certainly Herman has railed against.

David 10:44

That’s Robert ‘Bob’ Costanza.

Robert Costanza 10:47

I’m a professor of ecological economics at the Institute for Global Prosperity at University College London.

David 10:55

Bob was also a long-time collaborator with Herman. [music continues then ends]

Robert Costanza 10:59

The designers of GDP railed against using it as a measure of societal wellbeing, so we’ve known about the—[chuckles] those problems from the beginning, literally, and yet, GDP and its growth seem to be, you know, the main focus of many policy decisions. And there are many economists that sort of support that and say, “That’s what we need to do to improve wellbeing,” but we know that that’s—you know, that’s a limited assessment. We’re beginning to see all of the, you know, negative side effects of that focus on GDP growth in terms of increasing inequality, you know, increasing environmental damage. You know, we need a different approach.

David 11:39

[harmonic music] GDP was never meant to measure our wellbeing, yet it enabled growth to become the leading economic and political dogma for the better part of the last century. Oil was pumped out of the ground with the goal of unlocking progress for all of humanity, but that progress has breached the planetary limits. Here’s the Post-Carbon Institute’s program director, Rob Dietz, who we met last episode. [music ends]

Rob Dietz 12:09

Money, of course, is hugely important for security, but what the hell is money useful for if the biosphere stops functioning? Right? [chuckles] I mean, if you can’t breathe, if you can’t eat, if you can’t get water we’re all done. So, the idea is to have an economy that doesn’t ignore the biosphere but rather—fits rather nicely within it. That’s really what ecological economics is all about.

David 12:38

[harmonic music] When we last left Herman in 1977, he was in a precarious position at Louisiana State University. His ideas about creating an economy which fit within planetary boundaries were too far ahead of his time. His colleagues were giving him the cold shoulder, his career was stalled, and his ideas about the steady-state economy were mocked by mainstream neoclassical economists. But the love and support that Herman received from his family helped him through these dark times. His wife, Marcia, was a constant support. [music continues then ends]

Barbara Barros 13:18

Herman was very attentive with me and very honest. I was amazed to meet someone so major. When I told my family I was going to marry an American, they asked me many questions, but I let them know that I had found the love of my life.

David 13:35

[jazz music] Food, music, parties, and, of course, love were the backdrop of their life together. This undoubtedly stopped Herman falling into despair in those difficult times in Baton Rouge. Despite the problems their father was having with his career, his daughters Karen and Terri have many happy memories of their parents from this time. [music ends]

Karen Daly Junker 14:02

They complimented each other—

Terri Daly Stewart 14:03

Yeah.

Karen Daly Junker 14:04

—very well. They were very affectionate—

Terri Daly Stewart 14:07

Yeah. [laughs]

Karen Daly Junker 14:07

—which was nice to see growing up; to see your parents hug and kiss a lot. [laughs]

Terri Daly Stewart 14:12

Yeah, they did. Yeah.

Karen Daly Junker 14:13

I mean, it was—there was a real physical attraction with those two. There was a lot of love there and romance. My mother hosted a lot of parties and dinners, but dad liked it too, I think. I think he could be very—

Terri Daly Stewart 14:25

Oh, yeah.

Karen Daly Junker 14:26

—he was very charming, and I think he was raised with a lot of that in Texas.

Herman Daly 14:30

My father, he had a hardware store. You know, we welcomed all customers. You know, my father’s saying about any group of people, you know, no matter who was, “You know, their money’s just as green as yours.” So, we had all sorts of customers. It was a good education because it brought me into contact with all kinds of people, every kind of person in the world, you know, and you have to learn how to deal with them and how to talk to them.

Karen Daly Junker 14:59

They were so good at that together and it’s something that my friends always commented on, “Well, your parents are just so lovely.” I mean, you would come and visit and they would—they just knew how to ask questions and….

Terri Daly Stewart 05:11

Right. How to interact.

Karen Daly Junker 15:13

They were disarming. They really made you feel at home. And it’s something I didn’t realize till I was more—when you grow up and you’re surrounded more by other people’s families, you’re like, “God, why is everyone so uptight?” You know?

Terri Daly Stewart 15:26

[Cranky 15:24]?

Karen Daly Junker 15:27

And, yeah, you don’t realize how lucky you were until—

Terri Daly Stewart 15:29

Yeah.

Karen Daly Junker 15:30

—you started to see how other families interacted.

David 15:33

These social gatherings were the genesis of a new type of economic community, one which encompassed academics, thought leaders and experts from a variety of disciplines.

Karen Daly Junker 15:45

He was very respectful of the kind of multidisciplinary approach. In retrospect, the friends that came over from LSU weren’t necessarily from the business school [of 15:54] economics. [chuckles] It was the ecological, geological, science people, or maybe an English professor too or—you know, it was always a mix of people.

David 16:07

Unlike the siloed approach that had long dominated mainstream economics, this new school of economic thought was rich, diverse, and welcoming. Here’s Rob Dietz.

Rob Dietz 16:20

He did find community and he kind of helped invent that community through ecological economics.

Brian Czech 16:27

There’s a significant amount, it seems to me, of arrogance in the circle that deals with economic growth theory.

David 16:37

That’s Brian Czech again, who we heard from last episode. Brian is the executive director of the Center for the Advancement of the Steady State Economy, or CASSE. Back to Rob.

Rob Dietz 16:51

They were like, “Well, you just don’t get it. You’re a biologist. You’re an ecologist. What could you possibly understand about economics without spending 10 years at Harvard or MIT,” or wherever, “Getting a degree in neoclassical economics?”

Brian Czech 17:05

The field of conventional economics or neoclassical economics was very closed-door. The problem always was there was little to no ecological background of those scholars, or even scientific in general—in more general terms. It took someone like Herman to have both a solid—rock solid background, as he did in neoclassical economics, and the open-mindedness, the experience, the interest.

Rob Dietz 17:45

I think Herman found a lot of community with those kinds of people who were attracted to economics that really does incorporate the real world. That has as its base the idea that the economy is embedded in the biosphere.

David 18:04

As well as planting the seeds that would sprout a community of heterodox thinkers, Herman also had a few economists in his corner, fellow outcasts from the ‘School of Mainstream Economics’. Here’s one who we heard from briefly last episode, Brazilian ecological economist Colvis Cavalcanti.

Colvis Cavalcanti 18:23

I was a traditional economist although I had very serious concerns about the economic theory thinking that it is not good for explaining basic things. Like, for instance, the situation of the Visalia indigenous population. The first time I met Herman was in April 1970 at Yale University. He was there as a visiting professor, from that moment on we became friends. And it coincided that I was coming from Vanderbilt, where Nicholas Georgescu-Roegen was a teacher.

David 19:13

Georgescu-Roegen was Herman’s academic supervisor and mentor, whose principles of the entropy law formed a key part of Herman’s economic theories. Colvis was also a staunch admirer of Georgescu-Roegen.

Colvis Cavalcanti 19:29

This permitted that we had some easy understanding of questions that were related to thermodynamics and the economy, and from that time on we started [getting 19:48] ideas. I visited Herman a few times in the US. He came to Brazil. We had a very good workshop with other people, and this only stressed the significance of our friendship. It helped that Herman is married to a Brazilian woman. In 1983, I took Herman for a conference in Berlin. I programmed the course with Herman. We tried to introduce a new vision. I think it is an idea of the meaning of our work together.

David 20:36

[slow rhythmic music] We’ll hear more about the outcome of this talk in the next episode. Colvis and Herman’s meeting of minds and their ensuing 45 years of friendship and academic collaboration would prove vital to the development and spread of ecological economics principles, particularly in Brazil. But Herman also had allies closer to home, and given the circumstances in the last place you might expect, Louisiana State University. Here’s Bob Costanza again.

Robert Costanza 21:11

I was born in the United States in a very infamous little town in Pennsylvania called Donora.

David 21:17

In late October, 1948, the small steel town of Donora, Pennsylvania, around 25 miles from Pittsburgh, was suffocated by a toxic fog. [music ends]

Newscaster 21:29

Residents have difficulty in breathing the murky air. 20 die, 400 others are stricken with respiratory ailments. Oxygen tents care for sufferers in the town’s community center, transformed into a hospital. Investigations are launched. A local zinc plant suspected of emitting poison smoke is closed down. Rain brings relief, but an epidemic of pneumonia is feared in the wake of Donora’s deadly plague of smog.

David 21:53

[slow rhythmic music] By the time rain finally cleared the air on October 31st, at least 20 residents were dead and nearly half the town’s 14,000 residents reported an array of respiratory problems, including being left gasping for air and complaints of unbearable chest pains. Bob Costanza was born here just a few years after this environmental disaster took place. It would take decades for lawmakers to respond, and Donora became a grim milestone on the path of the US environmental movement. Back to Bob. [music ends]

Robert Costanza 22:31

My father worked in the steel mill. As a result of that incident, eventually they closed down the steel mill and we moved to Florida. I grew up mainly in Florida and then had—went to the University of Florida where I got my PhD, working with Howard T. Odum who was a systems ecologist. And so my background is, really, systems ecology.

David 22:54

As we heard in the last episode, Limits to Growth was also rooted in systems ecology. Bob also went on to work with Dana Meadows later in his career, and is currently a member of the Club of Rome. Growing up in the shadow of the Donora tragedy inevitably influenced Bob’s worldview.

Robert Costanza 23:15

I think also the understanding that, you know, this rush to grow and to make steel and to do all of these things, you know, had significant side effects that were not positive. I remember growing up in that area near Pittsburgh and that city was literally black, you know, with coal soot. All of the buildings were covered with black smoke.

David 23:36

After he finished his PhD Bob was looking for a job, which is how his path crossed with Herman’s.

Robert Costanza 23:45

We met at my job interview at LSU. I had known about him for years from reading his books, Steady-State Economics, and my PhD advisor, H.T. Odum, recognized that he was one of the few economists in the world that actually understood anything about the way the world really worked.

David 24:02

Bob got the job. In part, perhaps, due to Herman’s favorable impression of his research which similarly linked ecological and economic systems. And despite, or maybe because of, the hostile atmosphere at LSU, Bob and Herman began a deep and enduring friendship.

Robert Costanza 24:21

Yeah, we sort of hit it off pretty well and became friends as a result of that. We talked a lot about what was going on in the world and why economics was so recalcitrant to any, you know, realistic ideas about how the world worked and how to put, you know, ecology and economics together. We were colleagues at LSU for about eight years, and that’s kind of where we hatched the ideas for the Journal of Ecological Economics and the Society for Ecological Economics.

David 24:51

[rousing music] We’ll be hearing a lot more about both the journal and the society next episode. The friendships and academic collaborations that Herman shared with both Colvis and Bob ended up forming the bedrock of ecological economics. And while it’s important to remember that Herman is thought of as the father of ecological economics, his ideas did not spread in isolation. Bob Castanza was the synthesizer who had bring forward he and Herman’s shared vision into academic and policy circles worldwide. In Brazil, Colvis Cavalcanti fused his ideas with Herman’s. He would adapt ecological economics to the realities of Brazil and the communities of the global majority, helping to internationalize the movement. [music continues then ends]

[fast rhythmic music] The love of his family, the beginnings of a new intellectual community and connecting with some important academic allies and collaborators got Herman through the difficult times at LSU. The other touchstone that helped Herman remain steady was his faith. [music continues then ends]

Peter Victor 26:06

He was heavily influenced by his mother in terms of religion from a very early age, and Herman remained religious. He called himself a general-purpose Protestant. He stayed firmly committed to the principles of Christianity, and I think they played a major role in his capacity to withstand criticism; because he had a firm belief in what he was saying and why he was saying it.

Terri Daly Stewart 26:34

Dad grew up, I think it was evangelical, reformed. Probably, I guess, more of a Lutheran background. That time of his life, that was, you know, a very strong part of their culture. He emulated that a lot in us growing up. I mean, we continued, you know, being active in church. I think he felt called to study and to talk about these bigger picture things, and [he’d be 26:57] courageous in doing that. I know he explored those areas. Like I know he explored a book with John Cobb about his views with religion.

David 27:06

[jazz music] John Cobb Jr. was a theologian and philosopher born in 1925. His childhood was spent in Japan, where his parents were missionaries, giving him an early sense of life beyond us borders. When the family returned to the United States, he was horrified by the racism he saw during the internment period, where more than a hundred thousand Japanese Americans were stripped of their homes and livelihoods. [music continues then ends]

Milton Eisenhower 27:41

When the Japanese attacked Pearl Harbor, our West Coast became a potential combat zone. Living in that zone were more than 100,000 persons of Japanese ancestry: two thirds of them American citizens; one third aliens. We knew that some among them were potentially dangerous. But no one knew what would happen among this concentrated population if Japanese forces should try to invade our shores.

David 28:10

[rousing music] After the end of World War II he returned to a different Japan, one under American occupation. There Cobb was confronted by devastated cities and shattered communities. He was horrified by the suffering of people he had once known as neighbors, yet he also saw their resilience rebuilding amid the ruins. This experience profoundly changed his worldview, convincing him that philosophy, theology, and economics must be rerouted in justice. Herman and John Cobbs shared common experiences, religious faith, and transdisciplinary approach to academia meant that it was perhaps inevitable that they joined forces. John Cobb had already contributed to Herman’s 1973 collected work Toward a Steady State Economy. They built on that collaboration to jointly write For the Common Good, redirecting the economy toward community, the environment, and a sustainable future. From Herman’s perspective, he believed economics could only serve both people and planet if it was built with the right foundations, what he called the ends-means spectrum. Here’s Peter Victor. [music ends]

Peter Victor 29:37

Herman came up with the idea of the ends-means spectrum when he was teaching. He wanted his students to understand that the normal scope of economics was not the whole story. So, he would talk about what he called intermediate means, which are things like commodities, buildings, healthcare. The goods and services which the economy can make available serves intermediate ends. You can be fed, you can be housed. These are important things, but they cannot exist on their own. The intermediate means have to be made from the fundamental stuff of the earth. The materials that go to make the buildings or to provide the food come from mother Earth, but life has more about it than just being well fed and well housed. What’s the purpose of life? So, he talked about the ultimate end. We’d need to think about more important things. More overriding things than just taking care of our households. And so he had the spectrum that went from ultimate means to intermediate means to intermediate ends to ultimate ends. And he drew this for the students and it helped them in a discussion of, “What is the economy for?”

David 31:03

Here’s Herman’s words read by Jess, our producer, from a 2022 interview with journalist David Marchese in The New York Times.

Jess Schmidt 31:13

When you study economics, you’re looking at the relationship between ends and means. You want to allocate your means so as to maximally satisfy your ends. But traditionally economics has begun with what I would call intermediate means and intermediate ends. Our intermediate ends might be a good diet, education, a certain amount of leisure, health — the benefits of wealth. We dedicate our means toward these intermediate ends. Our intermediate means are commodities that we’re able to produce: food and industrial goods, education. Economics is going from intermediate means, which are limited, to intermediate ends, which economics says are unlimited. I say, let’s not just talk about intermediate means. Let’s ask what our ultimate means are. What is necessary to satisfy our ends and which we ourselves cannot make but must take as given?

Peter Victor 32:09

Herman found the answer for himself in religion, but he knew that not everybody did that. And so, at least in one of the versions of the ends-means spectrum he puts [religion question mark 32:20] for the ultimate ends. And I think this is, to his credit, you know, he had an open mind. He was a religious person, but he was not bound by the constraints that that might impose on others.

David 32:33

[rousing music] Herman believed that only by starting with this foundation, the ends-means spectrum, could economics function for the good of both people and planet.

This both flipped and greatly expanded upon the traditional view of the economy. It solved Herman and John Cobb’s main critique of modern economics, that it was far too narrow in scope. The ends-means spectrum reminds us where the things we consume actually come from and asks us to decide as individuals and as a community what our ultimate ends are, our overarching purpose, and whether the means we are currently using actually help us achieve those ultimate ends in a way that is physically sustainable. It would hand society back its compass but Herman and John Cobb also knew that this was only part of the story. The stage itself had changed. Herman set this out clearly in what will become a famous diagram. [music continues then ends]

Herman Daly 33:42

Many ecological economists like to say, “Well, we’ve got the biophysical world and then we have the social world inside that, and then we have the economic world inside that.” That makes sense to me. I’d go along with that. The larger social connections of language, religion, history, laws under which you live, those things make up the society. Then the other thing that I included in that diagram, which often kind of gets glided over, was the empty world and the full world.

David 34:19

[fast rhythmic music] For most of human history, we lived in what Herman called an empty world; few people, vast resources, nature seemingly without limits. In that world, growth often did mean progress, because the scarcest things were human, labor and capital. Today, we live in a full world. A planet crowded with people, cities, machines, and waste. Now it is nature that has become the limiting factor; forests, fisheries, fertile soils, and the atmosphere’s capacity to absorb carbon. The empty world, full world analogy has proved to be one of Herman’s most enduring ideas. Here’s Colvis Cavalcanti again. [music continues then ends]

Colvis Cavalcanti 35:12

I think we need a paradigm shift. We have to think in terms of what—two things that Herman Daly used, full world and empty world. In an empty world you have many possibilities. In a full world you are limited by what you can do.

David 35:39

[rousing music] But these revelations weren’t the only groundbreaking theories contained and for the common good. Herman and John Cobb argued that alongside the lost sense of true ends and means, and the transition from an empty world of abundance to a full world of limits, the traveler had changed as well. In other words, us. [music ends]

Peter Victor 36:06

The way in which the human being is understood in economics is a totally individualistic entity. I can’t even use the word person. We don’t know where they’ve come from. They seem to be born as adults, totally rational, fully informed, and the only social connection they have with other people is when they buy and sell something from them. And this characterization of humans in mainstream economics is given the name Homo Economicus. Daly and Cobb found this to be a completely inappropriate and unhelpful description of humans if you want to talk about human wellbeing and human welfare and how societies and economies really function, so they came up with the idea of the person-in-community. And all that means is that, well, we know where people come from and we know they start out as babies and children. They depend very much upon not just their own parents and family, but on the broader community and that’s how they learn their language, for example, and so on. They said that you have to have this richer understanding of people if you’re going to have economics that will serve the interests of people, and that’s what they tried to describe in the book.

Herman Daly 37:18

Economics conception of human beings is very individualistic. You know, an economic man is an isolated atomistic individual. I learned with John Cobb the conception of persons-in-community. A person is not related only externally to others, but their internal relations of identity. For example, “Who am I?” “Well, I’m son of, father of, friend of, citizen of….” And if you take away all of those relationships, there’s not much left to define me. So, the idea then is community is very fundamental not only in and of itself, but in the definition of person-in-community which kind of substitutes for isolated individual.

David 38:14

Here’s Gaya Herrington weighing in with her thoughts.

Gaya Herrington 38:17

I do think that almost purposefully in the beginning when we saw the environmental movement grow, where there was an emphasis on individual action, “Buy this green product” and, you know, “Don’t toss your trash,” and that kind of thing. And I think that’s on purpose because the real change is going to come from us forming connections across the world with people who think like you, but also definitely within your local community. Bringing communities together rooted in your local environmental system and finding solutions together based on that unique location that you’re in, and that’s the kind of work that we all need to be doing together. And I do think that there are some very powerful actors that are fighting resistance, that want to hang on to these current structures because they benefit them so well. I do think they are vastly, vastly outnumbered and they need us more than we need them, for sure. When we’re together we don’t even need to fight them. We are just creating our own future together.

David 39:17

[fast rhythmic music] Mainstream economics is built on the figure of Homo economicus; the isolated self-interested consumer. For the Common Good offers a different picture. The person-in-community, a human being whose identity and choices are shaped by relationships, culture, and the earth itself. For both Herman and John Cobb economics could not be rebuilt until the compass, the stage, and the traveler were set right again. So they turned to the question of measurement because they reasoned, “What good is a new direction and a new understanding of who we are if we keep using the same broken yardstick?” In response, they built the Index of Sustainable Economic Welfare, or the ISEW. Here’s an excerpt from a piece by Robert Costanza and Lisa Wainger titled ‘No Accounting for Nature: How Conventional Economics Distorts the Real Value of Things’ that ran in The Washington Post read here by Bob. [music continues then ends]

Robert Costanza 40:27

GDP, as presently defined, ignores the contribution of nature to production, often leading to peculiar results. For example, a standing forest provides real economic services for people by conserving soil, cleaning air and water, providing habitat for wildlife and supporting recreational activities. But as GDP has currently figured, only the value of harvested timber is calculated in the total. On the other hand, a billion spent by Exxon and others on the more than 100 oil spills in the last 16 months all actually improved our apparent economic performance. Why? Because cleaning up oil spills creates jobs and consumes resources, all of which add to GDP. Of course, these expenses would not have been necessary if the oil had not been spilled, so they shouldn’t be considered benefits. But GDP adds up all production without differentiating between cost and benefits, and is therefore not a very good measure of economic health.

David 41:24

[fast rhythmic music] The ISEW didn’t just ask, “How fast is the economy growing?” It also asked, “Are our lives improving within the limits of the earth and are those gains shared fairly?” It was Herman and John Cobb’s way of giving economics a new measure, one that matched its proper compass, stage and traveler. It was also a return to Herman’s foundational argument against uneconomic growth. Here’s Peter Victor again. [music continues then ends]

Peter Victor 42:02

They wanted to see, “Could we measure how the economy was doing in terms of sustainable economic welfare?” Economists use the word welfare, not to mean welfare payments but as another word for wellbeing or happiness, if you like. And so, what they did, they took consumption and they said, “Well, if people are making those choices, we’ll assume they know what’s good for themselves. We’ll count that as a benefit.” But they also added in estimates of the environmental damages being done in order to support the consumption. They said, “Well, we’ve got to take that away from the consumption level to get a more accurate measure of sustainable economic welfare,” and they made about six or seven major changes, adjustments to GDP, to come up with their index. They added in the value of unpaid work. They took away the value of time spent commuting. And so they made a whole series of these adjustments. They got their index of sustainable economic welfare, and here is its great strengths. It was measurable dollars. Some would say, “That’s its great weakness as well. How can you really measure people’s wellbeing in dollars?” But once you’re saying, “We’ve got to challenge GDP,” if you think it’s inadequate, if it’s misleading, if you can come up with an alternative measure using the same, or as we say, metric dollars, you can then compare the two.

David 43:27

Herman and John Cobb’s conclusions were devastating. Here’s Bob reading another excerpt from his article.

Robert Costanza 43:36

They concluded that while GDP in the United States rose over the period from 1956 to 1986, ISEW remained relatively unchanged since about 1970 when factors such as the loss of farms and wetlands, cost of mitigating acid rain effects and health costs caused by increasing pollution are accounted for, the US economy has not improved at all.

Peter Victor 44:00

They found something very important had happened. The per capita GDP had still risen, but the index of sustainable economic welfare had actually gone down. This is exactly what Herman had been surmising, that the benefits of growth were now being outweighed by the costs.

David 44:22

[fast rhythmic music] After developing the compass, the stage, the traveler, and the yardstick, Herman and John Cobb insisted on one final element, the anchor of community. “Economics,” they argued, “Could no longer treat society as just a collection of isolated consumers.” Here is Peggy, one of our executive producers, sharing their simple but profound solution. [music ends]

Peggy Whitfield 44:53

We are persons-in-community that there is no genuinely human life when community is destroyed. Today, it is important to think of the community served by the economy as enduring indefinitely through time.

David 45:07

[fast rhythmic music] For the Common Good was not a diversion from Herman’s earlier Steady-State Economics but a deepening of it. The steady-state had already provided the ecological frame, limits to throughput, sustainability, balance. Now with Cobb, Herman added the ethical, spiritual, and communal frame that was so important in his own life, redefining who we are, what we value, how we measure progress, and where the economy belongs. It was an attempt to refound economics on firmer ground; compass, stage, traveler yardstick, and above all the anchor of community. Herman and John Cobb also explicitly set out their religious views and how they informed the writing of For the Common Good as well as the pathways away from the belief that infinite growth on a finite planet was possible. [music continues then ends]

Herman Daly 46:09

I remember when I co-authored the book, you know, For the Common Good with John Cobb my instincts were, “Well, we’ll start out with sort of our basic assumptions. You know, lay those on the table and go forward.” [laughs] And John says, “No, no, no. Nobody will continue reading. So, we’ll have to develop our arguments sort of in their terms first, at the end of the book we’ll have a confessional chapter which we say some of the things that we might have wanted to say.” I felt that logically, if you are going to have intermediate ends, and if you’re going to have to rank the intermediate ends in terms of some priority, then that would logically require some appeal to a higher criteria end. So I thought maybe, you know, that would have a way of pulling things together.

David 47:07

Their arguments cite liberation theology and the burgeoning Christian environmental movement in general, but call on the need to make common cause through community.

Peggy Whitfield 47:19

We would’ve found that all community is to be celebrated. As our Catholic sisters and brothers have long known, this message, we think, is now the one of greatest urgency for the world. Hence, in our book, the emphasis lies here. We celebrate all human community as it struggles against the atomization inherent in enlightenment thoughts and modern practice, especially economic practice. We rejoice in the extension of community among those of our time who have come to reaffirm community with all peoples, with other animals, with all living things, and with the whole earth.

David 47:55

They also explicitly warned about the dangers of zealotry, whether Christian or secular in nature.

Peggy Whitfield 48:02 

Perhaps the problem is not so much that the religious depths are ineffective in society, but that they express themselves so often idolatrously. Explicit religion becomes the sacred canopy that justifies parochial and even selfish interests, as well as counterproductive inherited patterns of thought and morality. The same religiousness expresses itself in highly secular context, in absolutizing secular beliefs, methods and habits of mind. In some sense, it is religiousness that the new vision will have to overcome. Our point is only that the changes that are now needed in society are at a level that stirs religious passions. The debate will be a religious one, whether that is made explicit or not. The whole understanding of reality and the orientation to it are at stake. We think that to ignore that, to treat the issues as if they could be settled by abstract reason, is misleading. The victory will go to those who can draw forth these deepest energies of the centered self and give them shape and direction. Getting there, if it happens at all, will be a religious event. Just as getting to where we are now was a religious event.

David 49:17

[jazz music] It is deeply ironic that it took two religious men to call out the secular but pseudo religious belief in never ending growth on a finite planet. But this message and the themes and ideas interwoven through For the Common Good were incredibly resonant for both religious and non-religious audiences. We’ll hear more about how this work paved the foundations for the creation of one of the most influential papal works of recent times, Laudato Si, in the next episode. [music ends]

[rousing music] When For the Common Good was published in 1989, it met mixed reviews and, unsurprisingly, mainstream economists and journals ignored it altogether. But given the profound impact that this book has had on today’s thought leaders, it’s clear that it was just too far ahead of its time. Here’s Peter Victor. [music ends]

Peter Victor 50:17

I did a survey of people to find out what had influenced them what they thought about Daly and his work, and many times people would refer to that very book, For the Common Good, as an eye-opener for them and in quite a few cases changed their lives.

David 50:35

[jazz music] The ideas in Steady-State Economics and For the Common Good unsettled the foundations of conventional economics. But in that disruption, they also opened up space for other ways of thinking about prosperity, about community, care, wellbeing, and about the planet itself. Within that foothold, new strands of economic thought began to grow. [music continues then ends]

Peter Victor 51:04

I’ve been interested for some time in the extent to which his ideas influenced others who use sometimes a different language but say much of the same things that he has. The same sort of critique of the economy and when suggestions as to what needs to be done to fix the problems. The circular economy is very widely discussed now in circles. The circular economy is an example of a label that many people can say, “Yes, I like that.” They can say it because they think they can make more money if they run their businesses more efficiently and don’t produce so much waste and find ways of reusing it or selling it to somebody else, redesigning cities so that they are more self-sufficient can be part of a circular economy and so on.

David 51:56

We’ll be hearing about some urban case studies that are employing circular economy principles on their path to a greener future later in this series.

Peter Victor 52:06

The degrowth movement which has a very strong political element….

David 52:14

While Herman didn’t necessarily agree with all the principles of the degrowth movement, it nonetheless owes its origins to his work. We’ll visit a scholar at Universitat Autònoma de Barcelona, home of the first international master’s degree fully dedicated to research and policy on degrowth, in an upcoming episode.

Peter Victor 52:40

Then there’s the regenerative economy. This is the term that an American John Fullerton, a great friend of Herman Daly and myself, I have to say, likes to use. He asked the question, “What’s required to ensure that the economy can keep regenerating? Have that longer life?”

Katy Shields 52:59

I define regenerative economics as economies that are trying to not just be a bit more sustainable, but really repair. Repair nature and repair also our social relations in society so we’re trying to do better.

David 53:14

That’s Katy Shields. We heard from her last episode. She co-created the Tipping Point podcast on the Limits to Growth study. She’s also an economist who’s particularly interested in the role that regenerative economics can play in her current home city of Vienna. We’ll be hearing more about Katy’s work in Vienna in our final episode.

Peter Victor 53:36

The idea of a wellbeing economy is to think about the good life. What is a good life and what makes up a good life and how can the economy best serve what’d be the endpoint in itself?

David 53:50

We’ve featured many leading wellbeing economists throughout our five seasons of Cities 1.5 and you’ve already heard from some of them in this miniseries.

Katherine Trebeck 54:01

I mean, the simplest way I can describe it is essentially an economy that is deliberately, purposefully, concertedly designed to deliver social justice on a healthy planet. It’s about stepping back and saying, “What sort of economy do we need to deliver what people on planet truly need and truly want?” And it’s essentially also about saying the economy is not so much a goal in its own right, but needs to be designed to be in service of those, I guess, higher order goals of social justice and environmental health.

David 54:32

That’s Katherine Trebeck, a political economist, writer and co-founder of the Wellbeing Economy Alliance and WEAll Scotland. We heard from her at the end of episode one. Last but not least, perhaps the most well-known of Herman’s ideological offspring.

Peter Victor 54:51

I’ll finally mention the doughnut economy, which is a very clever idea of Kate Raworth to draw a simple diagram of a doughnut, the outside representing planetary boundaries and the inside representing a range of social, political, economic objectives that you wish to meet. And the challenge that we have, the way she put it, was to meet those objectives within planetary boundaries that gave life to the doughnut, and that’s another inspired by ecological economics, and particularly by Herman Daly.

David 55:22

You’ll remember Kate from last episode. Her epiphany came from reading one of Herman Daly’s books during jury service. We’ll be hearing from Kate and another doughnut economy expert later on. In fact, she’s one of Kate’s colleagues at the Doughnut Economics Action Lab, Cities and Regions Lead Leonora Grcheva.

Peter Victor 55:44

These are not all of the movements’ initiatives that are underway that reflect his work, but they certainly do show the sort of influence that he’s had.

David 55:55

[jazz music] Let’s return to Herman’s story now and go back in time a little to the period leading up to the publication of For the Common Good, the sense of peace and wellbeing the Dalys felt in Baton Rouge was about to be shattered.

Peter Victor 56:13

What was happening as time went by while he was at Louisiana State University, his wife was, well, getting abused in various ways. Going to social gatherings and other women actually would come up and say, “You’ve got a crazy husband. He’s got crazy ideas.”

David 56:30

Here is Herman and Marcia’s younger daughter, Karen.

Karen Daly Junker 56:34

It was a summer when he was away on some fellowship, maybe it was Australia, I don’t know, we got a lot of phone calls that became very stressful. You know, I remember answering the phone and it was like, “Oh, is your dad home? Oh, he’s traveling, isn’t he?” And then they would say really mean things to my mother. Really horrible things to her on the phone. And so, it was harassment.

David 56:56

The voice was male, but otherwise there were no clues. Was it a colleague or an enemy Herman had made?

Karen Daly Junker 57:06

We think it was probably some disgruntled student or something, and there was really nothing we could do. I mean, we let people know. Our neighbors were very supportive. But my mother, who was anxious and high strung, it really got to her and we kind of had to leave town for the summer. And we went to the beach with some neighbors and got away from it for a while and then came back. But we never really found out who it was.

David 57:30

Unsurprisingly, this harassment made Marcia feel deeply unsafe.

Peter Victor 57:35

At the times when he was away he, because he was traveling a fair bit, she wouldn’t stay in the house on her own anymore. So, it was getting unpleasant.

Karen Daly Junker 57:44

I mean, it’s just people like that they’re just hiding behind a phone, or today it’s hiding behind the internet or whatever. It was disturbing as a teenager, for sure.

David 57:55

[jazz music] Herman had reached his limit. The roadblock stalling his career progression at Louisiana State University coupled with threats against Marcia, and by extension both of their daughters, left Herman looking for a way out. When Robert Goodland offered him a job at the World Bank in Washington, DC, he said yes without a moment’s hesitation. [music ends]

[fast rhythmic music] Next time, what does a world that works for everyone look like and what do we need to change to get there? We’ll be exploring the splash Herman made at the World Bank and his deepening frustrations with the mainstream ‘growth now, clean up later’ policies that laid the table for the global inequality we continue to be plagued with today. [music continues then ends]

[jazz music] This has been Going Steady with Herman Daly: How to Unbreak the Economy (and the Planet).

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, the think tank for cities and climate, where I’m also the managing director. C40’s mission is to use the voices and the actions of the mayors of the world’s greatest cites to help the world avoid climate breakdown.

Special thanks must go to the Daly family for their support and generosity in telling Herman’s story. Thanks also to our consultants and fact checkers for the series, Peter Harnik, Rob Dietz and Peter Victor, the later who also graciously shared his interview recordings with Herman from 2022 to use on the show.

This podcast is written and produced by Jessica Schmidt and Peggy Whitfield and edited by Morgane Chambrin. Our executive producer is Chiara Morfeo.

The fight that Herman Daly started is still alive and thriving today. To learn more, visit the show’s website linked in the episode notes. See you next time. [music continues then stops]