This is a good answer to the Fermi paradox, not least of which because it doesn’t assume that “civilization” will necessarily either grow or collapse. Infinite exponential growth is impossible, but we’ve had a functioning ecology on earth for a billion+ years so there must be some way for life to reach a level of dynamic homeostasis over long periods of time.

It’s also a good explanation for why there were so many one-planet/one-system high tech civilizations in Star Trek, but only a handful of major interstellar colonial civilizations. The Prime Directive tells us that every civilization that was formally visited by the various Enterprises would be warp-capable, but if every civilization either grew exponentially or collapsed then these one-off civilizations make no sense.

If, however, a lot of civilizations get to a point of stability within their home system, and therefore have no need to expand beyond that, then it makes sense that there would be a whole bunch of little semi-utopian societies just quietly doing their thing, only reaching out when they’re facing some sort of major existential threat, or out of pure curiosity.

That also explains the function of the Federation pretty tidily. If there are a whole bunch of planets that have reached global communism, or something like it, then it makes sense to have an interstellar union that those planets can join for the sake of mutual protection, mutual aid, cultural and scientific exchange, etc. Basically civilization insurance.