Economics:

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Economics Science, Religion, or Defense of
Power Richard B. Norgaard University of
California, Berkeley June 30, 2006 Master
Class CSIRO Emerging Science Social and Economic
Integration
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Economics is a word with multiple meanings and
roles in (post)modern society. Economics is
the most rigorous of the social sciences, a
secular religion, and in practice a defense of
power and the status quo.
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Economics is clearly a science for economists use
mathematics, statistics, and earn Nobel
prizes. They have a dominant model that is
widely applicable, colonizing the other social
sciences, and is irrefutable. They are
empirically rigorous and have developed
econometric methods to test hypotheses and
estimate parameters.
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Economics is a secular religion.Can (real)
religions continue to avoid economics?Dont we
need another religion to move away from
material culture and find identity in nature and
community?
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Economics supports power and the status quo. It
derives answers by assuming the last dollar
spent by Bill Gates produces the same amount of
happiness as the last dollar spent by a peasant
in Bangladesh. Governments hire economists in
important positions of authority. The World Bank
and IMF are institutions now dominated by
economists. Larry Summers Memo
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Larry Summers to Bank Staff December 12,
1991 Just between you and me, shouldn't the
World Bank be encouraging MORE migration of the
dirty industries to the LDCs Less Developed
Countries? I can think of three reasons 1) The
measurements of the costs of health impairing
pollution depends on the foregone earnings from
increased morbidity and mortality. From this
point of view a given amount of health impairing
pollution should be done in the country with the
lowest cost, which will be the country with the
lowest wages. I think the economic logic behind
dumping a load of toxic waste in the lowest wage
country is impeccable and we should face up to
that. 2) The costs of pollution are likely to be
non-linear as the initial increments of pollution
probably have very low cost. I've always though
that under-populated countries in Africa are
vastly UNDER-polluted, their air quality is
probably vastly inefficiently low compared to Los
Angeles or Mexico City. Only the lamentable facts
that so much pollution is generated by
non-tradable industries (transport, electrical
generation) and that the unit transport costs of
solid waste are so high prevent world welfare
enhancing trade in air pollution and waste.
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3) The demand for a clean environment for
aesthetic and health reasons is likely to have
very high income elasticity. The concern over an
agent that causes a one in a million change in
the odds of prostrate cancer is obviously going
to be much higher in a country where people
survive to get prostrate cancer than in a country
where under 5 mortality is 200 per thousand.
Also, much of the concern over industrial
atmosphere discharge is about visibility
impairing particulates. These discharges may have
very little direct health impact. Clearly trade
in goods that embody aesthetic pollution concerns
could be welfare enhancing. While production is
mobile the consumption of pretty air is a
non-tradable. The problem with the arguments
against all of these proposals for more pollution
in LDCs (intrinsic rights to certain goods, moral
reasons, social concerns, lack of adequate
markets, etc.) could be turned around and used
more or less effectively against every Bank
proposal for liberalization.
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Whats an ecological economist to do?
Conventional economists work with all of the
different meanings and roles, inconsistent as
they obviously are. How can an ecological
economics emerge in the midst of these multiple
meanings and roles and how can ecological
economists work with them?
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Whats an ecological economist to do?
A brief history of economics Mercantilists Physio
crats Adam Smith as moral philosopher Thomas
Malthus and use of religious language David
Ricardo Agustin Cournot
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Whats an ecological economist to do?
Augustin Cournot I believe that there is an
immense step in passing from theory to government
applications I believe that theory loses none of
its value in thus remaining preserved from
contact with impassioned polemics and I believe,
if this essay is of any practical value, it will
be chiefly in making clear how far we are from
being able to solve, with full knowledge of the
case, a multitude of questions which are boldly
decided every day (final paragraph of the preface
to The Mathematical Principles of the Theory of
Wealth, 1838?)
The economist considers the body social in a
state of division and so to say of extreme
pulverization, where all particularities of
organization and social life offset each other
and vanish. The laws that he discovers or
believes to discover are those of a mechanism,
not those of a living organism. For him, it is no
longer a question of social physiology, but of
what is rightfully called social physics. (P56
of Materialisme, Vitalisme, Rationalisme, 1875
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Whats an ecological economist to do?
Early American Economists Reverend John
MacVicker Henry Carey Henry George Richard
Ely John Stuart Mill Alfred Marshall 19th century
Mathematizers Jevons (and coal), Walras,
Edgeworth Economics in the US Robber Baron
Era Influence of the Great Depression and
WWII Welfare Economics and Benefit-Cost Analysis
and Objectivity Progressive Economics Era,
Markets and Government Growth, Scarcity, and the
Environment The Rise of the Chicago School of
Economics
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Whats an ecological economist to do?
Free Market Fundamentalist Nonsense Prices, or
prices corrected by looking at other prices, tell
us what we need to know. Barnett and Morse,
1963, Scarcity and Growth, Resources for the
Future / Johns Hopkins University
Press Declining resource prices over last
century means resources are not scarce. Economic
models of scarcity and prices all condense
to If resources are scarce, If resource
allocators know they are scarce, Then resource
prices will indicate their scarcity.
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Have to assume economic actors know, but if they
do, why not just ask them? What if prices are
changing because society has decided to change
institutions to conserve resources?
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Whats an ecological economist to do?
Free Market Fundamentalist Nonsense Prices
tell all (prices only reflect how we, the rich
more than the poor, act on what we know)
Privatize everything, private choice always
better than public Dead-weight loss fallacy
Sustainability is about efficiency
Globalization and trade of capital
Environmental Kuznets Curve proves we just need
to grow Ignoring of widening inequalities We
see both a growing concern about materialist
lives and psychological well-being and a
collective inability to address the economy and
economic ideology as a central issue.
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Whats an ecological economist to do?
Quandaries for Ecological Economists Make
market work better, a la environmental
economics? Attack economists as false
prophets? Correct bad influence of economists
meta-model on how they develop and apply theory?
(include distributional options in analyses,
correct GDP, Develop new models (coevolutionary
development, ecological footprint,
etc)? Encourage methodological pluralism and
pragmatism and deliberative democracy?
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Whats an ecological economist to do?