Since the 1970s, the concept of a steady-state economy has been associated mainly with the work of leading ecological economist Herman Daly — to such an extent that even his boldest critics recognize the prominence of his work.[12]:167 [5]:32 [13]:9

Herman Daly defines his concept of a steady-state economy as an economic system made up of a constant stock of physical wealth (capital) and a constant stock of people (population), both stocks to be maintained by a flow of natural resources through the system. The first component, the constant stocks, is similar to the concept of the stationary state, originally used in classical economics; the second component, the flow of natural resources, is a new ecological feature, presently also used in the academic discipline of ecological economics. The durability of both of the constant stocks is to be maximized: The more durable the stock of capital is, the smaller the flow of natural resources is needed to maintain the stock; likewise, a \'durable\' population means a population enjoying a high life expectancy — something desirable by itself — maintained by a low birth rate and an equally low death rate. Taken together, higher durability translates into better ecology in the system as a whole.[14]:14–19

Daly\'s concept of a steady-state economy is based on the vision that man\'s economy is an open subsystem embedded in a finite natural environment of scarce resources and fragile ecosystems. The economy is maintained by importing valuable natural resources from the input end and exporting valueless waste and pollution at the output end in a constant and irreversible flow. Any subsystem of a finite nongrowing system must itself at some point also become nongrowing and start maintaining itself in a steady-state as far as possible. This vision is opposed to mainstream neoclassical economics, where the economy is represented by an isolated and circular model with goods and services exchanging endlessly between companies and households, without exhibiting any physical contact to the natural environment.[15]:xiii

In the early 2010s, reviewers sympathetic towards Daly\'s concept of a steady-state economy have passed the concurrent judgement that although his concept remains beyond what is politically feasible at present, there is room for mainstream thinking and collective action to approach the concept in the future.[2]:549 [16]:84 [6]:83

Defining a Steady State Economy