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September 23, 2009
Ross Gittens makes a good point in his article in the Sydney Morning Herald. Referring to the climate crisis he says that though we've seen it coming for years we still can't take it seriously. He says that there is a need to shift from a "growth at all costs" economic model to one that recognizes the real costs and benefits of growth.
The core of Gitten's critique of, and breakout from, the ideology of free market capitalism and unlimited economic growth is this:
Even the economists who brought us the emissions trading scheme don't adequately appreciate the problem we've got. They think all we've got to do is switch to low-carbon energy sources (ideally by finding a way to capture all the carbon emitted by burning coal) and the economy can go on growing as if nothing had happened. Being economists, they see us as all living in an economy, with this thing at the side called the environment that occasionally causes problems we need to deal with. As usual, wrong model.
In reality, the economy exists within the ecosystem, taking natural resources from that system, using them and then ejecting wastes, including sewage, garbage and all forms of pollution and greenhouse gases.
He adds that on the one hand we're chewing through non-renewable resources at a rapid rate and using renewable resources faster than their ability to renew themselves. On the other, we're spewing out wastes faster than the ecosystem can absorb them. Global warming is an example of the latter.
Mainstream (neo-classical) economics, with its negative conception of freedom, holds that economic growth, the democratization of affluence, and ever increasing consumption are both the formula for individual and social happiness and the goal of public policy. All traditional economic problems (poverty, overpopulation, unemployment, unjust distribution) have a common solution, namely an increase in wealth.The way to get richer is by economic growth.
This disconnects economics from the economy's biophysical foundations and is blind to the biophysical limits to economic growth. It is flat-earth economics since nature is not a containing envelope, but just a sector of the macro-economy - mines, wells, croplands, pastures, and fisheries.
The possibilities of economic growth increasing costs by more than it increases benefits (which is what climate change suggests) introduces the idea of sustainability. Ecological economics maintains that the economy is a subset of an ecosystem which is finite, non-growing, and materially closed (i.e., no matter enters or leaves it) and that it uses the environment as a source for material inputs and as a sink for wastes.
Unfortunately the economy has become so large relative to the ecosystem that human activity is undermining the ecosystem's ability to support human life. Hence the need for a new model of the economy and development.This requires making the shift from thinking of the economy as a growth machine to ecological economics that models the economy as a living system.
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When I studied economics we were told we would be masters of the universe. Ours was not a dismal but a noble science. It had harnessed the verities of maths to those of human behaviour and would go on to conquer politics. Indeed it had conquered politics since all politics is about ensuring economic growth and only what measures matters.