Economics for a finite world

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Advice for an economy addicted to growth but stalling out. Photo: Goodnight London/Flickr.

“Any fool can make something complicated. It takes a genius to make it simple,” said Woodie Guthrie. Nowhere is this more true than in books about economics, filled as they often are with wishful thinking dressed up in pseudo-scientific jargon.

And nobody needs to get off their arrogant high horses and scale down their ambitions in light of peak oil, climate change and other ecological limits to human expansion more than do economists. Two books published by colleagues at a think tank devoted to reforming the economics field aim to bring practitioners of the dismal science back to earth.

Can never get enough

As an author, Rob Dietz is no fool. In Enough is Enough: Building a Sustainable Economy in a World of Finite Resources Dietz is clearly not satisfied with the lazy argot of mainstream economics to deal with the real question of human economies — how we get and spend in a world where there’s never enough for everyone’s greed.

Dietz shows that he’s genius enough to make things simple for an intelligent lay reader by starting each of his chapters not only with a comic strip panel from the political cartoonist Polyp, but also with an anecdote to argue for an economy where the goal is not more, but enough.

For example, he begins his chapter on overpopulation with the story of his boyhood friend Bobby, who was designed the 200 millionth American when he was born to a Chinese-American family in suburban Atlanta in 1967.

Since Bobby’s birth, Dietz explains, world population has doubled from 3.5 to  7 billion. To help make such a big number understandable, Dietz quotes a couple statistics from National Geographic:

  • It would take two hundred years to count to 7 billion out loud.
  • In 7 billion steps, you could circumnavigate the globe 133 times (assuming you could walk on water).

Dietz is also not a fool in that he rejects from the outset the founding fiction of all neo-classical economics, namely, that infinite economic growth is not only desirable but that it’s even possible on a planet with limited resources and dwindling places to store our pollution. This is a message that the public and economists alike need to hear again and again in the era of peak oil and climate change. Thanks to Dietz for delivering it in a clear and engaging way.

Big name economists in shocking supply

Supply Shock

Supply Shock: Economic Growth at the Crossroads and the Steady State Solution by Brian Czech, New Society Publishers, 366pp, $22.95.

Dietz’s colleague at the Center for the Advancement of the Steady State Economy, Brian Czech, shares an understanding of ecological limits to the economy and promotes it in his book Supply Shock: Economic Growth at the Crossroads and the Steady State Solution.

Czech’s and Dietz’s books each garnered a foreword by the dean of no-growth economics, Herman Daly, making me wonder if CASSE got some kind of grant for outreach to the economics profession by putting out two books at the same time.

Dietz was trained in economics, but like such pop-econ writers as behavioral economist Dan Ariely (author of Predictably Irrational) or Steven Leavitt (author of Freakonomics: A Rogue Economist Explores the Hidden Side of Everything), Dietz makes the dismal science accessible and unintimidating.

By contrast, Czech offers up the usual econ class historical figures and schools of thought that we’re all tried to forget since college. This is funny, because unlike Dietz, Czech is an environmental scientist by training. Yet, in Supply Shock, after talking a bit about land and water use, Czech goes pretty heavy into the history of classical and neo-classical economics.

If you can’t get enough of Malthus and Mill, if you want to learn what’s so bad about David Ricardo or if you’ve always wondered about the Marginalist Revolution, then Czech’s survey of the top names in economic theory since the Industrial Revolution won’t disappoint.

Czech’s tome would be perfectly at home in an Econ 101 classroom, and hopefully an open-minded teaching assistant at State U somewhere will be willing to assign it, just to give undergrads a break from standard texts by Gregory Mankiw and others towing the neo-classical line about the goodness of endless growth. But the general reader will probably find Dietz’s approach to the topic of steady-state economics easier going.

— Erik Curren, Transition Voice

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  1. says

    He’s not alone in rejecting infinite growth, Our 2010 paper for the Economics for Ecology conferernce for example has been online 3 years and begind with this point about sustainability.

    “This conference primarily focuses on environmental economics, economics of ecology. My 2009 presentation to this conference was titled “Economics in Transition: The ‘Triple-Bottom Line’ of financial, social benefit, and environmental benefits. Among three main areas of economics, the financial sphere remains dominant over social economics and environmental economics. The reason for this is very simple: in order for any system of economics to be sustainable over time, it must first be financially sustainable. If a system costs more than it produces, it requires infinite inputs over time. Infinite inputs are not available in a finite world, and we live in a finite world. If we pursue a system that costs more than it produces financially, it must and will necessarily collapse. But now, the financial system itself is broken: it costs far more than it produces.”

    it is followed by the 1996 treatise for a prople-centered approach to economics.

  2. says

    Very clearly stated Jeff. I’m glad you’ve been on the case so long. Hopefully, soon the mainstream economists can start to get it. They’ve got some catching up to do.

  3. James R. Martin says

    Whether in economics, politics or media (etc.) “mainstream” refers to a kind of refusal to “get it,” especially when getting it would mean telling the truth about what was gotten. It’s best to see “mainstream” as a perpetual illusion factory meant to preserve a system of power-over, exploitation and domination. Various paradigms are, of course, long overdue for a shift (economics, medicine, politics…), but money-power (or power-money) controls the valves and gates of change. The question is … What do we do about that?

    • says

      What to do? I offer a Buckminster-Fuller type of approach – to displace the existing reality:

      A paper for 2009 on ‘Economics in Transition’ ends:

      “Thus the issue of ecology economics is not only ‘the third bottom line’, it might be more aptly renamed the economics of survival of the human species. That includes everyone, regardless of one or another economic hypothesis or theory they might prefer. We can endlessly debate and discuss von Mises/von Hayek free market economics/capitalism which proved successful except for the times it failed, and then study why it failed – repeatedly, the most recent failure in September 2008. We can endlessly debate and discuss opposing Keynesian government interventionist economics/capitalism, which proved successful except for the times it failed. That has been an alternating pattern for the past eighty years in Western capitalism. We can discuss the successes and failures of various flavors of communism and fascism. At this point, the simple fact is that regarding economic theory, no one knows what to do next. Possibly this has escaped immediate attention in Ukraine, but, economists in the US as of the end of 2008 openly confessed that they do not know what to do. So, we invented three trillion dollars, lent it to ourselves, and are trying to salvage a broken system so far by reestablishing the broken system with imaginary money.

      Now there are, honestly, no answers. It is all just guesswork, and not more than that. What is not guesswork is that the broken – again – capitalist system, be it traditional economics theories in the West or hybrid communism/capitalism in China, is sitting in a world where the existence of human beings is at grave risk, and it’s no longer alarmist to say so.

      The question at hand is what to do next, and how to do it. We all get to invent whatever new economics system that comes next, because we must.”

  4. James R. Martin says

    “We all get to invent whatever new economics system that comes next, because we must.”

    I agree that we must. But do we yet have the power of invention and implementation? I don’t think we do. Not really. The dominant (and dominator) system is kept in place vis-à-vis an equally entrenched system of political power, which itself is maintained and perpetuated by entrenched systematic manipulation of the public by way of mass media and “public relations”. This system of polical power has been called by various names: “managed democracy,” “plutocracy,” “corporatocracy,” … I’ll call it “pseudo democracy,” a regime characterized by the manufacture of consent (to borrow Chomsky’s phrase).

    What the world seems to need now is a paradigm shift in politics which might empower a paradigm shift in economics and other basic fields and endeavors. And I would advocate for democracy as the core feature of the emergent shift in politics. But democracy needs to be retooled and re-invented for our times and conditions. And that process begins by recognizing that (a), our current society (e.g., USA) is NOT democratic. Nor was it ever intended to be democratic! The “founders” abhored the very notion of democracy, calling it “anarchy”. They built a nation on the premise that democracy is a danger to the powerful and the elite and needed to be severely limited. (See David Greaber’s “The Democracy Project” — esp. chapter 3 — for a detailed discussion of this.)

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