What would a sustainable economy look like?

What would a sustainable economy look like?
Part 0, Part 1, Part 2, Part 3

There’s more to economic exchange than a pure exchange of value. In fact, the more I think about what an economy is, the more I realise that nearly every aspect of our lives is mediated through capitalism.

I want to take a few steps back and consider what are the elements of an economic system. Today's excerpts are for getting the conversation started, but to be honest I'm not very satisfied with the analysis presented by these authors. As always, the links to the original articles are in the section headers.

But anyways, let’s start with asking, what exactly does ‘Sustainable’ mean?


The 'wrong' definition of sustainablility
The world's nations presently define their top economic goal in terms of Gross Domestic Product (GDP). This is the total amount of production produced within a nation, usually within one year. In 2010 GDP varied from $16 trillion for the European Union, $15 trillion for the US, and $6 trillion for China to $16 billion for Afghanistan, $7 billion for Haiti, and $105 million for the Falkland Islands.
The top economic goal of most nations is a constant, never ending rise in total GDP of several percent per year. It's their economic growth target. Nothing is more important except for war. If a country's GDP goes flat, that's stagnation. If it falls for more than two quarters is a row that's a recession. Both are to be avoided at all costs.
The official GDP growth targets for several countries are: (Data sources vary per nation)

Sustainability is what people want to happen indefinitely. No country has a GDP growth target less than about 2%, except when recovering from a recession. Thus the defacto definition of economic sustainability is steady growth in total national GDP of a minimum of about 2% per year.
But this is the wrong definition. Total national GDP doesn't tell you how much the average person's income is. Nor does it tell how many people are at the low end of the distribution of income and are thus starving. Nor is steady growth even possible forever. Steadily growing total GDP is thus a flawed goal that can lead a country, and the world, terribly astray.