Thursday, January 28, 2010

Easter Island, societal collapse, the ecological crises and the state of economics

I have taken some time of to reflect on the ecological crises. My companion, amongst many others, was Ken Peacock, Living with the Earth. An Introduction to Environmental Philosophy. It contains the stories of collapse in ancient Phoenician society as documented by Vernon Carter and Tome Dale and Eastern Island as written by Jared Diamond.

Although very interesting to read, it struck me that these case studies are illustrating only a very particular view on the ecological crises. This approach emphasises that society and social structures are underpinned, influenced and shaped by independent biophysical factors and forces. The line of argument in both articles is more or less that both the Phoenicians and Eastern Islanders were expanding their population and/or economic power in the face of obvious resource constraints. Their myopic focus brought destruction and ultimate collapse and their stupidity is there for all to see. It is implicated that we are no different and that these examples are chilling case studies of mankind’s current senseless race towards an ecological doomsday. It is a narrative of environmental mortality, and the main culprit, especially for Diamond, lies in overpopulation. Deforestation, soil erosion, unsustainable agricultural practices such as goats on marginal lands are cited as the ecological triggers for collapse which in turn are caused by the intrusion of ever-expanding human populations.

Before reflecting further on these two articles I first want to take a step back into the history of economic thought. The close etymological basis of the words economics ‘oikonomia’ and ecology ‘oikology’ is well-known. What is not so well known, at least outside of the field of economics, is that economics has long since developed in an empirical direction, as based on the approach used in the physical sciences. The idea of ‘nomos’, which was still in inherent in the earlier classical political economy, lost its allure. Economics, at least the dominant neo-classical version of it, become empirical, mathematical, reductionist and libertarian. Its moral philosophy rested in the self-interest of individual agents. Natural resources and the environment were assumed to be in abundant supply, and on the bigger scale of wealth creation, it did not really matter either.

This has not always been the case. In earlier schools of economic thought, especially the Physiocrats, agriculture was seen as the only really productive sector that could generate a surplus. This link to land was still important for later classical economists (Adam Smith, Malthus, Ricardo, Mill and Marx), but it was postulated that surplus is derived from broader production, including factors such as labour and capital. The idea of a natural law, pertinent in the developing physical sciences, was vigorously applied into economic thinking. State regulation was frowned upon as working against the natural forces of enterprise, the results of which is measured as economic growth.

The detachment of wealth creation from agriculture and later land in general, is in my opinion, an important feat in economic thinking. That the physical and material inputs of land and natural resources became effectively ignored in later neo-classical economic thinking is not. What is at least needed at this stage is an acceptance of the laws of thermodynamics, and an acceptance of an “external” ethics, which may culminate through positive (man-made) law. The physical reality is that materials and energy, at least in the forms we know them, are running out. Sunlight provides the ultimate source of energy, and the socio-ecological transition towards using energy “that is closer to the sun” will become an important economic imperative. We are not necessarily talking about absolute limits in the strictest sense here, but of limits in our ability to translate sun-power into energy. It is further not only the supply of energy and materials that matter, but also the rate at which by-products such as waste and pollution can be absorbed by nature. This transition may need to be sped-up in the face of these increased loadings of waste and pollution into the natural environment.

Socio-economic forces may again have a profound impact in how mankind is adapting to the ecological crises. Eastern Island, in fact, may have also experienced a socio-economic transition, one untold in the narrative of human ecology. Recent research published in the American Scientist argued that the island was populated by humans far later than initially thought, that alien rats brought havoc even before the island was really populated, and that it was the contact with Europeans, with their diseases, the ensuing conflict and enslavement which brought the societal collapse.

Tales of ecological destruction and human greed are certainly valid in certain contexts, as are tales of genocide and collapse, I have some difficulties with the current meta-narrative as presented by scholars such as Diamond. I have also serious reservations on the current neo-classical economic thought that ignores the importance of nature, and more, that dismisses the idea of ‘oikonomia’, or the management or stewardship of our dwelling or household. Human ecologists are right in seeing the deficiencies of economic culture, but in their solution portray a kind of biophysical moral philosophy which I find hard to accept.

What this all means and what the implications are for an acceptable socio-ecological theory forward is something that needs much more reflection.

Of to another few days of hard reading...

Monday, January 18, 2010

Economists are stingy

The abstract of the study:
A substantial body of research suggests that economists are less generous than other professionals and that economics students are less generous than other students. We address this question using administrative data on donations to social programs by students at the University of Washington. Our data set allows us to track student donations and economics training over time in order to distinguish selection effects from indoctrination effects. We find that economics majors are less likely to donate than other students and that there is an indoctrination effect for non-majors but not for majors. Women majors and non-majors are less likely to contribute than comparable men.

Thursday, January 14, 2010

Green fiscal stimulus

A new paper Global Governance: The G20 and a Global Green New Deal analyses the worldwide green fiscal stimulus. South Africa's green stimulus as percentage of the total fiscal stimulus of $7.5bn was 10.7%, compared to the UK's 10.6%, the US's 12%, China's 33.4% and South Korea's 95.2%.

As the world recovers from the worst economic crisis since the Great Depression, the international community should promote a mix of policies to sustain this global recovery and create jobs through reducing carbon dependency, ecological degradation and poverty. Such a Global Green New Deal (GGND) requires a long-term commitment to implementing and coordinating “green investments” by the Group of 20 (G20), who should also adopt complementary pricing policies and foster international aid and other actions in support of the GGND. Developing economies should provide clean water and sanitation for the poor, create safety nets, invest in heath and education, and target energy and water poverty. Such a global strategy can revive economies, create jobs and improve the sustainability of world development.

Full citation: Edward B. Barbier (2010). Global Governance: The G20 and a Global Green New Deal. Economics: The Open-Access, Open-Assessment E-Journal, Vol. 4, 2010-2.