Eco-economist Herman Daly in a recent speech at a United States Society for Ecological Economics conference laid out ten specific policy proposals for moving to a steady-state economy at a level of physical wealth that the biosphere can sustain. Too bad Daly isn’t at the helm of U.S. economic policy rather than Summers, Geithner, and Bernanke – for whom the economy revolves around Wall Street rather than being embedded in the real, physical world.

Daly’s ten policy prescriptions are summarized below – but be sure to read the entirety of his speech at The Oil Drum to catch the flavor and nuance of his argument.

1. Cap-auction-trade systems for basic resources. Caps limit biophysical scale by imposing quotas on depletion or pollution, whichever is more limiting. Auctioning the quotas captures scarcity rents for equitable redistribution. Trade allows efficient allocation to highest uses.

2. Ecological tax reform—shift tax base from value added (labor and capital) and on to “that to which value is added”, namely the entropic throughput of resources extracted from nature (depletion), and returned to nature (pollution).

3. Limit the range of inequality in income distribution—a minimum income and a maximum income. Without aggregate growth poverty reduction requires redistribution. Set fair limits to the range of inequality.

4. Free up the length of the working day, week, and year—allow greater option for part-time or personal work so as to maximize enjoyment of life.

5. Re-regulate international commerce—move away from free trade, free capital mobility and globalization, adopt compensating tariffs to protect efficient national policies of cost internalization from standards-lowering competition. Trade and capital mobility must be balanced and fair, not deregulated or “free”.

6. Downgrade the IMF-WB-WTO to something like Keynes’ original plan for a multilateral payments clearing union, charging penalty rates on surplus as well as deficit balances—seek balance on current account, and thereby avoid large foreign debts and capital account transfers.

7. Move away from fractional reserve banking toward a system of 100% reserve requirements. This would put control of the money supply and seigniorage in hands of the government rather than private banks, which would no longer be able to create money out of nothing and lend it at interest.

8. Stop treating the scarce as if it were non-scarce, but also stop treating the non-scarce as if it were scarce. Enclose the remaining commons of rival natural capital (e.g. atmosphere, electromagnetic spectrum, public lands) in public trusts, and price it by a cap-auction–trade system, or by taxes, while freeing from private enclosure and prices the non-rival commonwealth of knowledge and information.

9. Stabilize population. As a start contraception should be made available for voluntary use everywhere.

10. Reform national accounts—separate GDP into a cost account and a benefits account.