Just as recognition that the earth was not the center of the solar system set the stage for advances in astronomy, physics, and related sciences, so will recognition that the economy is not the center of our world create the conditions to sustain economic progress and improve the human condition. After Copernicus outlined his revolutionary theory, there were two very different worldviews. Those who retained the Ptolemaic view of the world saw one world, and those who accepted the Copernican view saw a quite different one. The same is true today of the disparate worldviews of economists and ecologists.
These differences between ecology and economics are fundamental. For example, ecologists worry about limits, while economists tend not to recognize any such constraints. Ecologists, taking their cue from nature, think in terms of cycles, while economists are more likely to think linearly, or curvilinearly. Economists have a great faith in the market, while ecologists often fail to appreciate the market adequately.
The gap between economists and ecologists in their perception of the world as the 21st century began could not have been wider. Economists looked at the unprecedented growth of the global economy and of international trade and investment and forecast a promising future with more of the same. They noted with justifiable pride the sevenfold expansion of the economy since 1950, which raised output from $6 trillion of goods and services to $43 trillion in 2000 and boosted living standards to levels not dreamed of before. Ecologists looked at this same growth and realized that it was the product of burning vast quantities of artificially cheap fossil fuels, a process that destabilizes the climate. They looked ahead to see more intense heat waves, more destructive storms, melting ice caps, and rising sea levels that would shrink the land area even as population continued to grow. While economists saw booming economic indicators, ecologists saw an economy that is altering the climate with unthinkable consequences.
Economists rely on the market to guide their decisionmaking. They respect the market because it can allocate resources with an efficiency that a central planner can never match (as the Soviets learned at great expense). Ecologists view the market with less reverence because they see a market that is not telling the truth. For example, when buying a gallon of gasoline, customers in effect pay to get the oil out of the ground, refine it into gasoline, and deliver it to the local service station. But they do not pay the health care costs of treating respiratory illness from air pollution or the costs of climate disruption.
We have created an economy that is in conflict with its support systems, one that is fast depleting the earth’s natural capital, moving the global economy onto an environmental path that will inevitably lead to economic decline. This economy cannot sustain economic progress; it cannot take us where we want to go. Just as Copernicus had to formulate a new astronomical worldview after several decades of celestial observations and mathematical calculations, we too must formulate a new economic worldview based on several decades of environmental observations and analyses. A stable relationship between the economy and the earth’s ecosystem is essential if economic progress is to be sustained.
Although the idea that economics must be integrated into ecology may seem radical to many, evidence is mounting that it is the only approach that reflects reality. When observations no longer support theory, it is time to change the theory—what science historian Thomas Kuhn calls a paradigm shift. If the economy is a subset of the earth’s ecosystem, the only formulation of economic policy that will succeed is one that respects the principles of ecology.
The good news is that economists are becoming more ecologically aware, recognizing the inherent dependence of the economy on the earth’s ecosystem. For example, some 2,500 economists—including eight Nobel laureates—have endorsed the introduction of a carbon tax to stabilize climate. More and more economists are looking for ways to get the market to tell the ecological truth.
The existing industrial economic model cannot sustain economic progress. In our shortsighted efforts to sustain the global economy, as currently structured, we are depleting the earth’s natural capital. We spend a lot of time worrying about our economic deficits, but it is the ecological deficits that threaten our long-term economic future. Economic deficits are what we borrow from each other; ecological deficits are what we take from future generations.
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Adapted from Chapter 1, “The Economy and the Earth,” in Lester R. Brown, Eco-Economy: Building an Economy for the Earth (New York: W.W. Norton & Company, 2001), available for free downloading and purchase at http://www.earthpolicy.org/Books/Eco/index.htm.
Roger Wyer
This valuable post provides a clear model for holding economics in one hand and ecology in the other so we can see them both at the same time. Just as neither Ptolomy nor Copernicus provided a powerful, comprehensive model of astronomy, neither economics nor ecology provide a model of human possibilities.
Our answers lie outside the language, beliefs, and history we see in our hands. We don’t have the luxury of time for these two camps to battle it out or come to a compromise. Let’s start looking beyond…
Bobby B.
“The larger the economy becomes relative to the ecosystem, and the more it presses against the earth’s natural limits, the more destructive this incompatibility will be. The challenge for our generation is to reverse these trends before environmental deterioration leads to long-term economic decline, as it did for so many earlier civilizations.”
To which earlier civilizations are you referring? Did the Mayan compulsion for living sacrifices lead to the extinction of their staples and cause mass starvation? Were the hanging gardens such an affront to Mother Nature that she destroyed Babylon? Did Egypt’s fascination with building pyramids and other large structures create the Sahara Desert, and shrink their kingdom? Did the Roman viaducts cause water shortages and drive Nero to burn Rome? More importantly, when in history – other than the last 150 years as claimed by many environmentalists – has mankind had the ability to impact the world on a global scale?
We have all been taught that man has survived by being nomadic in nature. He moves to a promising area and adapts to live in it the best he can. If he is unable to adapt, he dies. If he adapts but the area becomes bleak, he seeks out another promising area. If his search for another promising area fails, he dies. The environmental movement’s global destruction scare mongering tactic is an attempt to convince the masses that there are no longer any promising areas, and that the end game is the extinction of mankind. That could be true, or it could play out that many die and the surviving remnant restarts history. The base question for all of us is whether or not we allow ourselves to live in constant fear of a theoretical environmental apocalypse. Do we cower before Gaia, ask forgiveness for every breath we take, and regress? Or do we progress with the understanding that conditions might change (even naturally change) and force us to adapt yet again? The secondary question is whether or not it is prudent to filter every decision through “green” lenses?
Now, even though most of this post is simply a statist’s condemnation of capitalism, I have to give credit where credit is due and am most impressed that the following sentences were included:
“Economists rely on the market to guide their decision making. They respect the market because it can allocate resources with an efficiency that a central planner can never match (as the Soviets learned at great expense).”
Whether one likes it or not, capitalism works.
Jeff McIntire-Strasburg
Bob– Check out Lester Brown’s work more thoroughly… there’s nothing “anti-capitalist” about his approach. And, while none of the scenarios you mentioned actually played out, there is evidence that previous civilizations did decline, in part, because of resource depletion. Jared Diamond’s Collapse is probably the most well-known recent work that addresses this concept: the first chapter in the Washington Post gives an overview of his approach.
And doesn’t your description of humanity sound a bit like the aliens in Independence Day?
Bobby B.
What I have read of Mr. Brown’s work suggests he believes that the government has the power to coerce the private sector into developing tomorrow’s solutions for today’s perceived problems. I did not mean to imply that he is 100% anti-capitalist. I have inferred that he would prefer a blended, state-run pseudo-capitalism in which the government dictates via an environmental yardstick what products any given company can “freely” produce; and how it can “freely” produce them.
I also don’t see the connection to the aliens in “Independence Day.” They were ship-bound beings looking for the natural resources necessary to fuel their ships and society. They were not looking for a new place to settle.
blutown
All Brown is describing is the economic concept of “externalities”. He then simply states what some of the externalitites are of our current industrial-era economy. The holy grail will be to find out how to price in the cost of the externalities (there is no such thing as “free” in economics)and we will have a much smoother transition to the next world economy. Without the price of the externalities built-in, we will simply keep going until the system collapses under its own weight (business as usual).
I believe that we witnessing the beginning of the end of the business as usual, industrial-era economy. What is yet to be determined is the path we will take to the next world economy. We need a lot more Lester Brown’s in the world to avert the second path.
Wytse
A nice example of this pricing of so called ‘externalities’ is found here:
http://www.economist.com/world/international/displaystory.cfm?story_id=13684132&fsrc=rss
Arguably from a biased source, it does appear to bode well for the use of free market economics as a way to tackle environmental issues.
Steven Earl Salmony
Implementing a Copernican Shift?
There are likely many ways to bring about a “Copernican Shift”. Perhaps I can put one forward here.
The gigantic scale and skyrocketing growth of the human population on Earth appears to soon become patently unsustainable on a planet with size, composition, frangible ecology and finite resources of Earth. Open discussion of the rapidly increasing size of the overwhelming “human species colossus” as a clear and present danger to future human wellbeing and environmental health needs to occur sooner rather than later. With regard to so serious and imminent a threat to the future of life as we know it, the current, calamitous choice of many too many leaders today to act on the wish to deny subjective discomfort and avoid objective danger could lead to some sort of incomprehensibly catastrophic ecological disaster. Perhaps one way to engender a Copernican Shift would be for leaders of the human community to be guided in their thought, speech and action by intellectual honesty, the best available science, moral courage and faith in God and, in so doing, choose to respond ably to dangerous circumstances through acknowledging, addressing and overcoming every human-induced global challenge.