The Steady State Economy Conference

Workshop 9: Business and Production

Question: In a steady state economy, what form would business and production take if markets are required to work within a system prioritising optimal scale and fair distribution?

Why: There are at least two competing theories on what the effect of a steady state economy would be on business and production. The first theory is that the current model of shareholder-owned profit-making corporations could still be maintained in a steady state economy because profit and growth are two very different things. Profit is simply the difference between a company’s income and its costs, and therefore it is possible for a company to be profitable without growing in size.

The second theory disputes this, however, arguing that the context in which businesses operate is very important, and that there is a relationship between profit and growth. Companies must compete against one another for market share (or simply to survive), and it is possible to make greater profits through economies of scale. Furthermore, investors are unlikely to invest in a company that isn’t growing. Thus the profit motive itself may be a problem for a steady state economy.

However, even if there is a relationship between profit and growth, it is possible to imagine a situation where some companies are growing, while others are going out of business, such that the total size of the economy remains the same. An analogy is to compare a steady state economy to a mature forest, where some trees are growing, others are dying, but the total size of the forest remains the same.

How: Some approaches that have been proposed to make business and production more compatible with (and supportive of) a steady state economy include: enhanced regulation, limiting the size of corporations, the creation of employee- or customer-owned co-operatives, a new “ecology of investment”, and the creation of social and ecological enterprises.

Andre Reichel    André Reichel (Speaker)

André Reichel has a PhD from the Institute of Economics and Law at the University of Stuttgart where his research focused on management systems for regional sustainability programs. He is scientific coordinator of the Graduate School for Advanced Manufacturing Engineering in Stuttgart and responsible for its Sustainable Manufacturing programme. André is also a member of the Stuttgart regional assembly where he holds a mandate for the Green Party (Bündnis 90/Die Grünen). More information is available on his homepage.

Adam Woodhall    Adam Woodhall (Chair)

Adam Woodhall founded PeopleProfitPlanet in 2006 to deal with the key challenge in today’s business world: how organisations move to a truly sustainable economic AND environmental model. PeopleProfitPlanet is an innovative consultancy that creates bottom line benefits by generating environmental change through training and consulting techniques to empower staff and management to take positive green actions. Adam has delivered to and inspired thousands of individuals throughout the UK and worked with dozens of organisations from corporate companies such as Parcelforce and Allianz Insurance to large public bodies such as Barnsley NHS and Business in the Community to many small businesses.

Dorron Otter

   Dorron Otter (Rapporteur)

Dorron is the Head of Economics and International Business at Leeds Metropolitan University. He has worked in the university for the last 20 years having a variety of teaching and academic management roles. His main teaching interest is in international political economy. He is the joint editor of The Business Environment: Themes and Issues published by OUP and he teaches a second level module in the School of Applied Global Ethics called “Environment and World Politics.”

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