In the previous article here, I reiterated a fundamental problem with mainstream economics. It fails to recognize that all economic activity is a part of, and as dependent on the ecosystem as any other aspect of human activity or the activities of other species. I urged mainstream economists not to let debates about the details of theory distract them from shifting their view to one in which the economy is viewed in its true relationship with nature. If they can do that, they can truly help to save the world by rethinking our approach to economic growth which, as it stands, is degrading the ecosystem and pushing us toward environmental collapse.
It’s not all the fault of the economists 🙂
But it’s not just mainstream economics which has lost sight of it’s connectedness to the ecosystem. The problem with economics is, in part, likely a reflection of a broader societal phenomenon. Recently, I came across a couple of David Suzuki articles which highlight the seriousness of the problem. (more…)
Posted in Carrying capacity, Ecological collapse, Ecological footprint, Ecology, Economic growth, Economics, Ecosystem, Environment, Julian Simon, Population, Population growth, Sustainability and the Big picture, World population
Having touched on population growth in the last entry, it’s time for a quick look at how economic growth has become a serious threat to the global ecosystem. This is a large topic which has filled a good number of books. But on its most basic level its logic is simple. The key point is that neoclassical economics, the dominant economic model for much of recent history, is based in large part on an assumption that the economy, as a whole, can and should continue growing forever. A major part of such growth is its physical dimension, which is well reflected in increasing “throughput,” defined by Herman Daly as “the flow beginning with raw material inputs, followed by their conversion into commodities, and finally into waste products.” (p. 28 ) The neoclassical view promotes unending physical growth and throughput
The problem with forever
When confronted with the prospect of depleted natural resources as a result of ongoing growth, the neoclassical economist’s answer is that human capital in the form of technical innovation will always make up for lost natural capital (natural resources), or even that we will always find new ways to extract ever more resources. (An article by the late economist, Julian Simon, provides a particularly striking example of this thinking.) The flaw in this model is self evident. It fails to acknowledge that the earth and its resources, as well as its absorptive and regenerative capacities, are finite. Indeed, it contrasts sharply with the newer “ecological economics” model which starts from the assumption that the economy is a part of the finite ecosystem and so should strive to respect its limits, lest it damage it. (more…)