The early history of modern ecological economics Inge Ropke
This paper concerns only the period from the beginning of the 1960s to the end of the 1980s—what could be called the early history of modern ecological economics.
Theoretical inspiration
Already in 1976, in the introduction to an anthology Perspectives on the Emergence of Scientific Disciplines, Lemaine et al. (1976) used the then fragmented studies of disciplines and specialties to formulate general questions that can be used to inform further studies of this kind. These questions provide a useful scheme to facilitate and systematize further analysis
The environmental agenda of the 1960s: a belated breeding ground
Thermodynamics inspired individuals to conceptualize economic processes in biophysical terms—in terms of flows of energy and matter.
Lotka’s contribution from 1925 is often pointed out as central, so energy was an obvious measure to cut across biotic and abiotic processes and to provide a common perspective on processes in nature and society.
While these reasons are all relevant, it can also be suggested that these authors did not succeed in establishing the new perspective, because they did not provide answers to the most pressing problems of the time when they were writing. Other problems were considered more relevant by the academic community as well as by broader social groups.
The Limits to Growth in 1972 (Meadows et al.). With this book, the resource aspect of the global challenge was put on the agenda. The United Nations Conference on the Human Environment in Stockholm in 1972 demonstrated that the challenges in relation to the environment, population growth and resources were now widely acknowledged.
Systems ecology
The research of the Odum brothers in the fifties contributed substantially to the development of new methods to study energy flows in a systems perspective. In particular, their study of coral reefs from 1955 was a breakthrough. An important methodological innovation arose from the increasing concerns over the effects of nuclear fallout and radiation on living organisms. The authorities financed research on how radiation could permeate a biotic system, and this research was based on the use of radioactive isotopes, which made it possible to track the movement of materials and energy through an ecosystem
Ecosystems tended to develop towards maturity—a stable state (homeostasis) where the interdependencies inside the system were highly complex, mutual dependencies and cooperation were just as important as competition, and a high diversity was achieved.
Both systems’ thinking and ecology came to influence several scientific fields. A field having much in common with the later development of ecological economics was ecological anthropology.
Scientific response: economics
Welfare economics took on the study of the environment specified in the following tasks: the background of the economic system’s allocative failures, the measurement of the surplus foregone due to these failures, and the design of allocation systems capable of realizing the foregone surpluses (Crocker, 1999). These tasks became the core of environmental economics when this field came into being in the beginning of the 1970s.
Daly, who draws on the work of Boulding (earlier contributions than the spaceship paper) and Georgescu-Roegen (see below), intended to recast economics as a life science focusing on the metabolistic character of economic activities, the bpassage of low-entropy matter-energy through its life-supporting input–output transformations into high-entropy wasteQ (p. 403) and emphasizing the large size that the human economy had achieved in relation to the natural environment. Ayres (who was educated as a physicist) and Kneese took their point of departure in the law of conservation of mass and viewed the economy in terms of materials balances: the inputs of raw materials, foods, etc. to the economic system are bpartly converted into final goods and partly become waste residuals.
The gestation period: from the beginning of the 1970s to the end of the 1980s
Mainstream economists took on the role of explaining that there are no limits to economic growth— especially after the publication of The Limits to Growth in 1972. The main arguments were introduced in Barnett and Morse’s classic from 1963: the price system and technical change will do the job.
Very important for the further development and diffusion of the ideas were Daly’s books and papers on steady state economics (especially Daly, 1977), because they are so well written and expose a mastery of metaphors. However, despite the diffusion of the ideas, the economists involved in related research were still scattered and few.
The 1970s and the beginning of the 1980s saw a new wave of interest in general systems theory. This was stimulated by the work of the physicist Ilya Prigogine and his research group in Belgium who introduced the concept of self-organizing, dissipative structures (Prigogine and Stengers, 1977, 1985). Whereas classical thermodynamics focussed on equilibrian disolated systems, Prigogine and others studied systems that are closed with regard to matter, but receive and give off energy. Such systems can be far from equilibrium, the processes taking place can be irreversible, and new structures can emerge— dissipative structures that are dependent upon continuous supply and the giving off of energy.
Concluding remarks
All research stems from previous ideas and experience, and in the case of ecological economics the internal intellectual processes have a long history. Most of the precursors were inspired by thermodynamics to rethink both natural and social processes in new terms
Researchers from several different fields were involved in the modern reformulations: systems ecology, different strands of economics (heterodox biophysical economics, environmental and resource economics, agricultural economics, socio-economics), energy studies mainly based on physics and engineering, and general systems theory. The development of new research techniques played a part in the elaboration and actual operationalization of the ideas, e.g. the use of radioactive isotopes in ecological research and the use of computers for modelling
When environmental policies began to be implemented, the political and administrative demand for research increased, but this mainly stimulated environmental economics focusing on valuation and regulatory instruments. However, the increasing environmental problems and especially the energy crisis also opened up opportunities for more heterodox research, e.g. resources became available for more transdisciplinary research.
The modern (re)formulation of the basic ideas of ecological economics was in place around 1970, but a long gestation period followed before the field was named and institutionalized. The establishment depended upon the social processes within the research community. First, the ideas had to be diffused before a critical mass of interested researchers was formed, and personal contacts were instrumental in this process. Second, co-operative initiators were needed.
So ecological economics had to wait for the next generation, A.M. Jansson (born 1934) and Daly (born 1938), who were open-minded, cooperative and committed to the combination of environmental and social issues— and who could both mediate the older researchers’ contributions and add their own perspectives.
At the same time, some of the most active economists behind ecological economics, such as Daly and Martinez-Alier, were at odds with mainstream economics. Daly’s motive for engaging in cooperation with ecologists was related to the development of mainstream environmental and resource economics, where the biophysical perspective virtually disappeared for a long period. He would really have liked to change the discipline from inside rather than creating a new field, but he came to the conclusion that this was not realistic.
The human economy is embedded in nature, and economic processes are also always natural processes in the sense that they can be seen as biological, physical and chemical processes and transformations; therefore, the economy ought to be studied also, but not only, as a natural object, so economic processes should also be conceptualized in terms usually used to describe processes in nature.
SOCIAL ECOLOGICAL ECONOMICS -Clive L. Spash
Economics in its mainstream and liberal form has become formal economics, and it has been misused to assess the negative impacts social metabolism has on the environment, using market mechanisms and treating everything, both commons and humans as commodities.
The developments and increase in understanding of the environment as a complex system did little to influence mainstream economics when dealing with environmental analysis, as economics has simply provided many times rather arbitrary monetary values to essential commons and natural spaces that as essential for the reproduction of life.
Social ecological economics aims to out beat mainstream economics in its tool to deal with environmental questions, but also to contribute to the apparently lack of social theory present in ecological economics.
The following paragraph illustrates the methodological flaws on mainstream economics, a field divorced from the empirical reality and its scrutiny, giving little explanation of the several crisis that happened in 1929, 2008 among others.
The lack of social theory for society is also happening in mainstream economics, which treats humans as self-interested utility-maximizing machines. At the same time, firms have the only goal of maximizing profits given a set of constraints, with no room for other goals or priorities. Exploitation, lobbying, and power relations have little room in theories around competitive markets. Pollution and cost-shifting in general are externalized from the behavior of firms, and treated as informational or simple reallocation problems. Macroeconomics is any better, as it treats materials and energy as unlimited inputs whose relevance is only considered as a function of actual relative prices. Limited substitution of factors of production and the cost of growth have little or no presence in most macroeconomic theories.
When proven wrong, such theories remain with the false excuse that no alternative models of organization and understanding of the social-ecological system exist, which is obviously false. The dualism between capitalism and state-led communism (normally referred to narrowly as what the soviet union implements, which is far from the core principles of Marxism and socialism), pushes further the hegemony of an ideology that is failing to organize society within planetary boundaries.
Systems analysis and several ecological economic publications assess that even it is not empirically testable, there are clear symptoms that an ecological collapse could happen in a given moment even if there are no observable threats of its immediacy.
Environmental analysis from the ecological analysis did not support sufficiently the social strata affected but the expansion of capitalism and pollution disproportionally shifted to the 'poor' and marginalized groups.
Another problematic approach has been the treatment of economics as a mechanistic, physics, or engineering field, one of quantitative optimization that leads to the obsession with efficiency even at the expense of life.
A lack of the role of social planning in the overall social metabolism, and how efficiency and technology are targeting capital accumulation and not a reduction in metabolism is missing in mainstream economics.
In economics, the non-human is treated as a mere resource, something to use, exploit, and dispose of at will. Economics only claims to produce those commodities or stocks that create more profit by its protection rather than by its use, which is rarely the case. The protection of other life forms or existing livelihoods such as millennial indigenous populations has no regard for economic thinking. According to economists, if there is something more profitable that can be done, it must be done.
Mainstream economics have alternatives that despite being silenced by their universities, do overcome most of their limitations, political ecology, and social-ecological economics both analyze and understand social metabolism as a means to an end, which is the provision of basic needs within planetary boundaries and the important of relations of power. Efficiency and competition play a much lesser role, and ethical questions are paramount. The false neutrality of economics is no longer accepted.
Class 1: What is ecological economics? Q&A
Røpke, I., 2004. The early history of modern ecological economics. Ecological Economics 50, 293–314.
- If the fundamental idea of ecological economics is “banal and difficult to disagree with” (p. 296) then why is it often ignored?
Spash, C., 2017. Social ecological economics. Chapter 1 in Routledge Handbook of Ecological Economics, Routledge: London and New York, 3-17.
What elements does social ecological economics offer that avoids the pitfalls of mainstream economic theory?
Clive Spash claims that there is a link between mainstream economics and the mainstream economy. Do you see this link too? How does it manifest? Can you give examples of how mainstream economics supports the capitalist status quo and vice versa?
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