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.