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July 6, 2009
The field of neo-classical economics in Australia has long been dominated by thinkers who unquestioningly accept the capitalist status quo and, accordingly, value the natural world only in terms of how much short-term profit can be generated by its exploitation. That ecological blindness sums up the Murray-Darling Basin does it not? We now live with the consequences.
The ecological blinkers of neoclassical economics, which excludes the planet itself from its vision, are well illustrated by a debate that took place within the World Bank, related by ecological economist Herman Daly, in Beyond Growth (Boston: Beacon Press, 1996 pp 5-6).
Gary Sauer-Thompson, Lake Albert, River Murray
As Daly tells the story, in 1992 (when Summers was chief economist of the World Bank and Daly worked for the Bank) the annual World Development Report was to focus on the theme Development and the Environment:
An early draft contained a diagram entitled “The Relationship Between the Economy and the Environment.” It consisted of a square labeled “economy,” with an arrow coming in labeled “inputs” and an arrow going out labeled “outputs”—nothing more. I suggested that the picture failed to show the environment, and that it would be good to have a large box containing the one depicted, to represent the environment. Then the relation between the environment and the economy would be clear—specifically, that the economy is a subsystem of the environment both as a source of raw material inputs and as a “sink” for waste outputs.
One never hears conventional economists talking about the ecological life support of the economy. The economy is free floating with mainstream economists see themselves as engaged in the science of economic growth.
Daley continues:
The next draft included the same diagram and text, but with an unlabeled box drawn around the economy like a picture frame. I commented that the larger box had to be labeled “environment” or else it was merely decorative, and that the text had to explain that the economy is related to the environment as a subsystem within the larger ecosystem and is dependent on it in the ways previously stated. The next draft omitted the diagram altogether
The assumption of endless economic growth, as if this were the purpose of society and the way of meeting human needs, seems naïve at best in the context of the Murray-Darling Basin.
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