One problem for the SSE already raised by the demographic transition to a non growing population is that it necessarily results in an increase in the average age of the population—more retirees relative to workers. Adjustment requires either higher taxes, older retirement age, or reduced retirement pensions. The system is hardly in “crisis”, but these adjustments are surely needed to achieve sustainability. For many countries net immigration has become a larger source of population
growth than natural increase. Immigration may temporarily ease the age structure problem, but the steady-state population requires that births plus in-migrants equal deaths plus out-migrants. It is hard to say which is more politically incorrect, birth limits or immigration limits? Many prefer
denial of arithmetic to facing either one.
The SSE will also require a “demographic transition” in populations of products towards longer-lived, more durable goods, maintained by lower rates of throughput. A population of 1000 cars that last 10 years requires new production of 100 cars per year. If more durable cars are made to last 20 years then we need new production of only 50 cars per year. To see the latter as in improvement requires a change in perspective from emphasizing production as benefit to emphasizing production as a
cost of maintenance. Consider that if we can maintain 1000 cars and the transportation services thereof by replacing only 50 cars per year rather than 100 we are surely better off—the same capital stock yielding the same service with half the throughput. Yet the idea that production is a
maintenance cost to be minimized is strange to most economists. One adaptation in this direction is the service contract that leases the service of equipment (ranging from carpets to copying machines), which the lessor/owner maintains, reclaims, and recycles at the end of its useful life.
Although the main thrust of reforms for the SSE is to bring newly scarce and truly rival natural capital and services under the market discipline, we should not overlook the opposite problem, namely, freeing truly non rival goods from their artificial enclosure by the market. There are some goods that are by nature non rival, and should be freed from illegitimate enclosure by the price system. I refer especially to knowledge.