Recently, a new school of economics called steady-state economics has seriously challenged neoclassical economics, the reigning school in Western economic decision making. According to the neoclassical model, an economy is a closed system involving only the circular flow of exchange value between producers and consumers. Therefore, no noneconomic constraints impinge upon the (income inequities, for example) can be found only in the capital that further growth creates.
Steady-state economists believe the neoclassical model to be unrealistic and hold that the economy is dependent on nature. Resources, they argue, enter the economy as raw material and exit as consumed products or waste; the greater the resources, the greater the size of the economy. According to these economists, nature’s limited capacity other elements—i.e., human-made resources—that will allow the economy to continue with its process of unlimited growth.
Some steady-state economists, pointing to the widening disparity between indices of actual growth (which simply count the total monetary value of goods and services) and the index of environmentally sustainable growth (which is based on personal consumption, factoring in depletion of raw materials and production costs), believe that Western economies have already growth, such as conservation, without sacrificing the ability to satisfy the wants of producers and consumers.
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