This book frames an economics of a crowded planet as the study of a materially large economy in stable alignment with nature and as the engine of economic policy. That economics is compared and contrasted with the current state of the field as it exists early in the twenty-first century. The book concludes with a discussion of ways economics might evolve from here to there. The set of ideas that emerges from this discussion is tentatively labeled âmarket planetarianismâ for reasons to be discussed. A formal theory of market planetarianism remains an opportunity for future development.
The perspective is deliberately from outside the economy looking in. It is from the point of view of the whole planet as a unitary entity, as distinct from the social perspective, which by definition is from the inside, occasionally looking out.
Is Planet Earth Finite or Are Resources Unlimited?
The appearance of a large human economy on planet Earth was so sudden on natural timescales that it appeared like a chemical state-change. Over the past ten thousand years, Earthâs biota has undergone significant changes due to the spread of people, but humanityâs appropriation of natural resources and its discharge of wastesâits material intensityâhas increased by orders of magnitude only within the last thousand years or so.1
One of the great misunderstandings between natural scientists and economists has revolved around the question of whether resources for the economy are limited. This question has arisen during the last few decades when it became apparent that the economy was becoming globally interconnected, both internally and with major planetary processes. The misunderstanding is significant because it reveals partiesâ distinct ways of thinking about the economy and nature.
Early human societies considered resources finite. They lived directly off natural resources, whose abundance was limited by solar flux. Hunter-gatherers and early agricultural societies understood the perils of taking more at any one time than nature could offer. As society diversified, however, an increasing number of people no longer lived directly off the land. This physical dissociation from nature sowed the seeds for a psychological one. In Europe during the so-called âRenaissance,â the psychological dissociation evolved into a presumption of dominance over nature. At that time, the global population and its total material intensity still were relatively small. The world seemed vast, and natural resources effectively limitless.
Then, late in the eighteenth century, the economy began to industrialize. It began living off stored solar flux in the form of fossil fuels. The population swelled as living standards improved. Material throughput mushroomed. It did not take long for some, whose profession was to study the natural world, to raise concerns about the growing material intensity of economic activity. Some authors have recently begun to refer to this new resource-intense era as the âAnthropoceneâ: an evolutionary period in which for the first time the activities of a single speciesâhuman beingsâhave measurable effects upon natural processes.2
Natural scientists measure such processes in terms of physical quantities: mass, velocity and pressure, for instance. To the natural scientist, planet Earth is finite, in a strictly material sense. It is materially closed, because all available material for human use is contained on Earth, the odd meteorite notwithstanding. Yet Earth is energetically open, receiving a constant flow of energy from the sun. If the economy ingests ever more stuff from nature, and ejects ever greater amounts of effluent back to nature, then this becomes a problem. It is not a sustainable enterprise. Not only are fundamental material limits in place but also Earthâs physical and biological systems form a complex of human life-support, which, if sufficiently destabilized, could bring societal collapse.
Economists, traditionally, study human choice. They measure preferences and values, which are nonmaterial measures. Since the economy incorporates a circulation of money, this money represents a convenient proxy for many kinds of value. To the economist, industrialization is a triumph of human technology. It adds value to the economy and increases living standards. If the scale of material intensity presents a long-term problem to the economy then, the conventional economist argues, the very technological brilliance that gave us industrialization in the first place surely can solve that problem as well. Provided the incentives operating within the economy are set up right, they will stimulate the necessary technological development.
Since Earth is materially closed, the resource-intensity problem can be solved if, and only if, it is vastly reduced. The conventional economic assumption of a triumph of technology therefore is a tacit admission of this fundamental biophysical limit. Resources for the economy may become âessentially unlimitedâ only if technology enables the economy to recirculate them. Energy for this recirculation must come mostly from current solar flux; otherwise, given current technologies, there will be fuel wastes.
There is very little prior evidence to suggest that technology actually will triumph in redirecting resource flows within the economy rather than through it, although, as Chapter 2 mentions, some recent evidence points to an incipient decoupling of economic growth and material intensity. In any case, for a large economy on a crowded planet to persist within the confines of natural capacity, such technology will have to be developed.
What Is Economics For?
For much of the twentieth century, most economists steadfastly maintained that, as the science of choice, economics did not need to consider all the other messy, bothersome problems outside the study of markets. Specifically, if the economy as a whole was becoming embroiled in coevolution with natural systems, then it was not for the economist to address this coevolution but the policymaker. The economist could only advise the policymaker on the possible effects of any relevant legislation or regulation upon the markets.
That position is reasonable only in a world having a small economy, one materially insignificant relative to natural processes. In a large economy on a crowded planet, economics becomes a different kind of practice. This is because the purpose of the economy itself in such a world is no longer merely to serve consumer sovereignty but primarily to ensure its own persistence in long-term alignment with nature. The purpose of economics is inexplicably bound up with the assumed purpose of the economy. On a crowded planet, the scope, relevance and importance of economics expand to more closely resemble the original meaning of the term. The term âeconomics,â came into use late in the nineteenth century as an outgrowth of the term âpolitical economyâ originating with such early nineteenth-century authors as David Ricardo and John Stuart Mill. It has Greek roots: from oikonomia, whose parts are oikos for house and nomos for custom or law. Oikonomia is âhow we run our house,â or âhousekeepingâ in modern parlance. âEconomicsâ came into use to describe the study of householdsâ allocation of scarce resources to satisfy wants. This etymological origin was understood all too well by former British prime minister Margaret Thatcher who, in defending her painful economic reforms of the early 1980s, referred to them as âgood housekeeping.â
Two popular textbook definitions of economics during the twentieth century were provided by Lionel Robbins and Paul Samuelson. Robbins defined economics as âthe science which studies human behavior as a relationship between ends and scarce means which have alternative uses.â3 Samuelson defined it as âhow ⊠we choose to use scarce productive resources with alternative uses, to meet prescribed endsâŠâ4
These definitions are almost as widely held early in the twenty-first century as when they were coined. They are sufficiently broad to encompass just about any definition of âproductive resourcesâ and âprescribed endsâ. However, they may have arisen as a product of the particular, mechanical mathematics employed by early economists. As Nicholas Georgescu-Roegen argued, âany system that involves a conservation principle (given means) and a maximization rule (optimal satisfaction) is a mechanical analogue.â5 If a different kind of mathematics were employed to model the economy, such as one describing a historical trajectory through event-space, then it could have a profound effect upon the perceived identity and purpose of economics.
On a crowded planet, one having a high population, the end in question is the long-term persistence of the economy. That end sometimes might be at odds with an individualâs prescribed ends, unless that individualâs goal alsowere âharmonyâ (however defined) with nature. The âproductive resourcesâ in Samuels...