Based on the economic theories of Herman Daly, the economics on Varok that are disrupted in "The Webs of Varok" depend on their being stable populations, those whose numbers remain unchanged. This requires a universal buy-in, an ethic that emerges from agreeing that replacement-only is the only humane option for a sustainable future. Universal recycling, localization, long-term manufacture of carefully selected technology, and a system of nonrenewable resource quotas provide the basis for a sustainable free market.
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The steady-state on Varok was defined as that level of population and resource stocks that provided a good life and a sustainable standard of living over a long period of time, with throughput of matter and energy maintained at the lowest possible rate. Birth and death rates were equalized and kept at the lowest possible levels, but those rates, as well as depletion rates of any resource, were subject to revision by popular vote; a higher material standard of living could always be voted in.
Of course, the quality of life deteriorated over the long-term if the limits were increased to high levels. The steady-state was an ethically-based system, not a system of politics.
Business-as-usual in the economies of Earth, be they Marxist, socialist, or capitalist, would be called treason on Varok, for the end-product of Varokian society was minimal throughput, not consumption. Treason lay in disregard for the future of the planet.
The priorities of the varokians were guided, not only by the principles of conservation, but by values that defined stability as more desirable than change, hand-work as more valuable than manufactured uniformity, local autonomy and self-sufficiency as more important than variety of choice. A low throughput of materials was considered essential so that labor and resources would not be wasted. The lifetime of all material goods was carefully assessed to insure the longest use possible. Manufactured goods were designed for the longest life and easiest repair possible. Distribution was arranged so that a large item could be shared by an optimal number of users. A central regulatory authority essential to the efficient operation of economic and social monitoring enforced limits set by universal suffrage.
Varokian priorities were evident in the small numbers of motorized vehicles produced and used by individuals. Houses were made of local material. If one didn't want to homestead, one contracted out for sustenance. Time was valued more than goods and was measured by the least change possible. Nothing was wasted. Economic growth was viewed as a cancer, an eroding force dangerously out of control.
Did the varoks hate change? Not if it was manifested by innovation in efficiency, particularly in the services, in communication, and in education. Though time devoted to intellectual or artistic pursuits was highly valued, the greatest value in regards to manufactured goods was not time-saving but intelligent selectivity in technological development. A new invention might be approved for production, usually on a local level, if it were more artistic or provided esthetic choice; otherwise it had to prove more saving of materials or energy, not time. Local production was encouraged, since large interdependent energy or industrial systems were seen to be far too vulnerable and conforming. The varoks’ ethical basis was far-sighted; it worked because time was equated--not with economic value--but with value lived. The Varoks took great pride in avoiding the traps of real and invented need. Technology, therefore, was devoted to living off the electro-thermal-biological income, not the terrestrial capital, as was done on Earth. For example, the use of daramonts and hand-power for agricultural production was a matter of pride more than necessity.
The moral impetus behind the steady-state was the concern for future generations, protection of subvarokian life, and limitation on inequities in wealth distribution.
The varokians recognized that the steady state was of necessity finite and approximate, but its one essential component was a stable population. They knew the balance would change as resource accessibility changed. Minerals don't become depleted, they become more and more expensive to mine. Recycling costs energy, as does repair. Therefore, continuing compromises were made between the costs of recycling and the costs of mining. Those effects least damaging to the environment were chosen whenever possible, unless resource depletion needed to be stopped in order to maintain stocks at a level needed to insure the quality of life in the distant future. Minimizing resource depletion always took precedence. Therefore, the stock of wealth on Varok did not grow, and mining costs did not escalate. A resource was no longer mined when it took more energy to extract than it provided. Production equaled depreciation. Artifacts were built to last a long time. Ease of repair and long-term availability of parts were required in engineering design. Pollution was strictly forbidden or heavily taxed when unavoidable. The goal of all economic activity was not product consumption but service in the interest of life quality.
The major function of government was to keep careful count of resource stocks and distribution so that throughput of materials and energy expenditure were kept to a minimum. The Varokian government counted all available resources and auctioned the depletion quotas of those resources. The quotas were set by popular vote as determined by the standard of living chosen by majority vote. The depletion quotas put a definite limit on aggregate throughput.
Energy expenditures and local sources of energy were counted by the Energy Resources Council, but only the cost of materials was regulated. Most private homesteads and small communities were self-sufficient in terms of food and energy and technical services. Advanced machines were shared until time was filled on a particular device. Quotas of non-renewable resources were adjusted to known consumption levels and were gradually lowered to the desired long-term maintenance level if necessary. Such quotas provided strong incentive for the development of technology.
Constant vigilance was necessary to account for the lives of all living beings and their environmental impact, including their various needs for food and shelter, so none would go hungry or cold while others indulged their greed. This was Orram's responsibility as Governor of Living Resources. New species were approved for defined ecological areas of Varok only after studies showed how their appearance might affect the balance of life. All costs were calculated as accurately as possible.
All quotas could be changed by petition for a vote, and they were periodically reviewed. Distribution rights for locally produced items were also monitored, and adjusted for instruments of selective technology that could be more widely distributed efficiently than manufactured locally. Examples included medical instruments, communications devices, the Ahlkahn railroad, wind generators, hydrogen transport vehicles, and the rare use of nuclear electric propulsion systems amplified with a fusion pulse in space.
In some cases, a graded tax was levied for long-distance distribution; but, in general, local manufacturing was valued for the local jobs it produced, its minimal transportation costs, and the psychological advantage of having a direct stake in one's standard of living. There was no central control of the manufacture of energy, so that locales might maintain their independence and control over their environment.
When local ballooning of a population occurred--as it did at Mt. Ni when Mahntik upset the balance by illegally distributing web goods and undercutting local markets--the resultant crowding usually was self-correcting. Jobs would become scarce and prices would rise. The real danger was in changed attitudes that accepted the crowding. Work hours would be shortened so all could share the jobs available, and the population density might be raised by vote if a trade of population numbers with another area could be arranged, or if the entire population of Varok voted an increase.
As with industrial energy allocation, the balance had to be kept. For example, a higher energy utilization by one industry could be allowed, if a saving in another industry could be made. Also, the overall investment rate of any industry was required to equal the depreciation rate of capital stock. Any product must be worth its cost of production, and a machine was not updated simply to introduce a new product, unless all expenses were justified by savings seen in the improvement. Credit was never extended. Where the money supply was not extended, inflation did not occur. Therefore, profit was seen by producing more than was needed. The depletion quota laws limited the introduction of new raw materials into the production process. It should be understood that the steady-state on Varok was not a failed growth economy, neither was it capitalistic nor socialistic. It was based on privately leased responsibility to the land and the free market.
The government on Varok provided certain essential services besides resource monitoring. One was high technology health care, which was centralized to avoid duplication of expensive equipment. It rarely lay idle, for emergency rapid air transport was part of medical preparedness. No centralized defense existed, only high technology emergency service. The major bureaucracy existed to monitor and control energy expenditure, the use of nonrenewable and living resources. Communication and energy services were decentralized to avoid catastrophic disruption of service.
The buyers of quota rights for resources bought them from resource sellers. The total number of quota units available were equivalent to the maximum sustainable yield for renewables. For nonrenewables, the quota was set according to the Varokians sense of ethics in saving for the future and keeping the ecological price low. Pollution quotas were rarely used since they involved micromanagement on the part of the government.
Local government provided communication, security, fire and disaster aide and relief. Distribution was limited to local areas in order to encourage local employment and use of local resources, which also discouraged central control of the free market beyond the quota system.
As an alternative to the inequities in heritable property, the varokians devised a system of stewardship leases of arable land. Enough difference in the maximum and minimum incomes was allowed so that it would act as an incentive. The upper limit on wealth accumulation gave the lease-holder of arable land or mineral-laden land no unfair advantage. Since the accumulation of capital was discouraged, business enterprises remained local and small, and all profits tended to go to dividends or salaries. Since taxes made capital difficult to accumulate and the money supply was held constant by lack of credit, production was deliberately discouraged and held to the level of generally accepted need. Again, that need was subject to popular vote. Only items fitting the need, which included items with artistic or esthetic value, were manufactured. If the records showed more products sold than the quotas allowed, then poaching of resources was assumed and the black market was quickly identified, evaluated and snuffed out if it proved wasteful.
A minimum income for the disabled was financed with a progressive income tax and the depletion quota auctions. When unemployment was a problem, the minimum income was increased in order to discourage nonproductive work.
The economy of Varok was an extended laissez-faire economy, extended because the extraction of raw materials for heavy industry was included in overall accounting. Resource mining was not a function of ownership.
The strictest boundaries set by the government were designed to maintain the population. The one Replacement Certificate registered to each inhabitant of Varok was transferable by sale or gift. Overbreeding, if not controlled by biological means, was accounted for by acquiring additional certificates of replacement.
Another feature of the steady-state that recognized the value of individual life and the importance of time over matter was the system of guaranteed amenity rights. These included the rights to silence, to free expression, free enterprise, living space, pure food and water, and privacy. The rights to clean air, freedom from noise above certain levels, and privacy were as sacred as the rights to freedom of expression.
The amenity rights were integrated with personal property rights, which extended to all persons in the form of rights to equal usage, not to outright ownership. There were homesteading rights on unused arable land and access to available land leases, the size of which were determined by local population density allocations (subject to vote and trade-off with other areas). Particular mineral and mining rights could be bought on public auction within the quota system. Also available were excess water rights above those needed for family homesteading, rights to native vegetation, and the right to the use of soil not needed for homesteading.
A summary of Varok’s economy can be seen in the work of Herman Daly: The Steady State requires 1) minimum and maximum incomes to limit inequality 2) transferable birth quotas 3) and depletion quotas auctioned by the government to limit total throughput. Daly notes that economic growth does not provide for a more equitable distribution of incomes, no matter what political system operates the growth economy. Rather, economic growth provides for nothing but government expansion