Herman Daly’s ideas are based on the understanding that growth can’t go on for ever (see also Limits to growth (Dennis Meadows) an Arithmetic, population and energy (Albert Bartlett)). In the post Growth versus development (Herman Daly), he makes the important distinction between quantity and quality (see also Growth versus development (Manfred Max-Neef)). Typical examples of our economic focus on quantity instead of quality can be seen in Pyramids of Waste (Cosima Dannoritzer) and in Moving Forward (Zeitgeist).
In this talk, Daly explains the fundamentals of Ecological Economics and the ideas of a steady-state, non-growing economy. You’ll often hear him refer to entropy, for descriptions of the concept see: Second law of thermodynamics (Through the wormhole) and more elaborately Entropy (Caltech). Daly attempts to bring physics and economics closer together (see the following blog for a similar point: Exponential Economist Meets Finite Physicist).
For similar arguments, see: Managing Without Growth (Peter Victor). For a critique of the ideas: A critique of ecological economics (Frank Rotering).
Herman Daly advocates for a steady state (non-growing economy). His teacher, Nicholas Georgescu-Roegen, came to disagree with him on this point. Jacques Grinevald in his Hommage to Nicholas Georgescu-Roegen explains that it is not sufficient to merely stop growing at the current level of economic activity of the North, for two reasons: (1) we already use resources above the regenerative capacity of the biosphere, at some point this will end, and (2) if we want the South to enjoy a bit more of the use of the resources to improve equity, we need to make room, and “de-grow” (see Degrowth (Different Views) for explorations of what it means). For a scholarly article on the debate, see: Kerschner, C. (2010). Economic de-growth vs. Steady-state economy. Journal of Cleaner Production, 18(6), 544-551. See also the documentary The end of poverty? (Philippe Diaz), which takes us to that inevitable conclusion (whether we want it or not). In more simple/accessible terms this is also argued in the video Biased development studies (Wolfgang Sachs). In defense of Herman Daly, however, the steady-state seems like it would be a first step.