On the History of Ecological Economic Thought
Introduction
Ecological economics is a subfield which examines the relationship between the economy and nature; it does so through an assessment of the roots of the modern environmental quandary with a particular focus on the accounting, consumption, saving, and distribution of energy (Becker, 2005). Environmentalism is studied as a political product of Ecological Economic Thought (EET). EET does however distinguish itself from Environmentalism, although “they (...) share the welfare economic framework and methodology” (Røpke, 2004). The dissimilarity between ecologism and environmentalism resides in the former being a science and the latter a socio-political movement.
This paper will address the normative, prescriptive dimension of ecological economics, in so doing, leaving the political environmentalist paradigm untouched. The International Society for Ecological Economics, established in 1988, “institutionalized” the discipline as one of the significant heterodox branches of economics (Paavola, 2011). In 1987, Joan Martinez-Alier published Ecological Economics: Energy, Environment and Society, often declared the Rosetta Stone of the discipline. It is pinpointed as the official academic start, despite the author themself declaring a much earlier beginning to EET.
The relationship between nature and man acts as the string of Ariadne throughout history. A study of its evolution incorporates the views of economists from all schools, and such holism warrants an examination across both time and space. Therefore, the paper is bordered by the early philosophical underpinnings of EET in Chinese philosophy, through the mainstream schools of economic thought, all the way to neo-colonial luminary, Samir Amin, and his expression of ecologism in his theory of delinking. Intertwined in this discussion will be the blossoming of EET out of the natural sciences, with particular attention allocated to the biophysical approach during the late 19th and 20th centuries.
The World as a Garden
The Classical Economists were no strangers to the relationship between nature and man. Some of the essential concepts within Ecological Economic Theory (EET), are common concepts that existed long before they were officially defined by the discipline–or even before the establishment of EET itself. One such concept is natural capital. Although David W. Pearce coined the term “natural capital” in 1988, as a way to describe “the set of all environmental assets”; the idea behind the concept has existed since the time of the Classical school of thought, dating back to the 18th century (Missemer, 2018).
As the father of economics, and one of the first Classical economists, Adam Smith's attention to specific aspects of society is of primordial importance to the history of thought within the discipline. In his work, The Wealth of Nations, he described nature as a producer, claiming that “nature labours along with man” and further acknowledged that “nature is capable of producing certain goods (...) never augmented by human industry”; the example of kelp in Book I, Chapter 11, is of particular applicability (Desroches, 2015). The Physiocrats’ particular concentration on agricultural activities initiated the natural capital discussion in Western economics upon which Smith constructed his views. This is best exemplified in Francois Quesnay’s view of nature as a “bona fide producer” whereby wealth is believed to be generated by agricultural production alone, a process in which “human labour (...) served as the midwife to economic production” (Desroches, 2015). Later in the anthology of the classical school, John Stuart Mill expounds on the role of nature as a producer but adds caveats to Smith and his predecessors. Despite Mill regarding the existence of natural objects (objects produced by nature) as “unimportant” and “instrumental to human wants”, their recognition highlights their presence in early economic conversation (Desroches, 2015).
Contrasting a Classical economist, Malthus, to a Romantic poet, William Wordsworth prompts a new perspective on the history and foundation of ecological economic thought. He romanticizes the core concepts of a crucial player in the history of economic thought and nuances Malthus’ vision of the booming industrious setting of 19th century England; this is so, even despite them never meeting (Becker, 2005). The reference to Malthus in EET is familiar but presents another perspective. This perspective, formulated from the same economic reality as Malthus, provides a different interpretation for the conceptual groundwork of EET. The Malthusian Law is clearly described by Thomas Malthus himself in An Essay on the Principle of Population and implies negative consequences for “the general question of future improvement of society”, entailing a “great restrictive law” that affects “plants and animals [sprawning] waste of seed, sickness and premature death” (Becker, 2005). The view of nature as an unconquerable restriction on economic activity is diametrical to that of poet William Wordsworth. In his conception of economic activity, Wordsworth is absorbed by “the pace, the unforeseeability, and the ceaseless dynamism of the ongoing economic transformation” (Becker, 2005). Whilst Malthus, and most other Classical Economists, view the continuity of nature as mutually exclusive with the prosperity of man, Wordsworth diagnoses the destructive potential of the industrial revolution as a result of the alienation of society from nature. As if responding to Malthus, Wordsworth paints the “unnatural conflict between humans and nature in the economic structure of his time” in his poetry, for example with a brilliant portrayal of the crassness of London (see The Prelude, Appendix 1) (Becker, 2005). Nonetheless, much of the present analysis in ecological economics flows from Malthusian ideology due to the Industrial Revolution era theme of the detrimental effect of human industry on nature. Specifically, in modern EET, Georgescu-Roegen incorporates the second theorem of thermodynamics, implying a restriction on economic processes to abide by the physical laws of nature (Becker, 2005). This core theory in EET illustrates the Malthusian influence as nature abides by laws which confront economic activity and condition the wealth of societies.
Economic history has broadened its scope across lands and the pertinence of non-Western economic thought in the contemporary academic landscape has become increasingly accentuated. Although Chinese scholars may not be relevant to the history of Western economic thought, the current role of the country in global economic production is no less negligible. Chinese traditions stress the symbiotic relationship between humans and nature in a way that is reminiscent of Wordsworth, belief in the emergence of natural ecosystems and the “interdependence of mind and nature” (Shi, 2002). More recently, Chinese EET has been underpinned by Marxist ideology, which proposes an ecological approach that integrates a self-regulating component to the relationship between man and nature. Although Western economists tend to steer clear of Marxism as an economic ideology, its dialectical approach to analysis greatly influenced thought in modern China. Despite the political reality that often shackles intellectual expression in that country, it is noteworthy that the largest economy on Earth adopts its ecological identity from Confucianism, Taoism, and ecological Marxism (Rui, 2012).
Moving Towards a Scientific Paradigm
If unorthodox visions of nature have recalibrated economic ecologism today, scientism has played a determinant role in its history. The biophysical approach to economic science threads the history of EET, connecting radical thinkers who observed the constraints on a finite world, the function of flows and stocks of energy and matter in the life-sustaining metabolic processes on Earth. In 1866, as an exception in the Marginal Revolution, Jevons dissected the non-renewability of coal and its implications for future generations, noticing the limits to the energy source on which economic production depended and how such limits exposed the need for a substitution. Jevons’ work fundamentally altered the course of ecological economic history, as he further discerned the “paradoxical positive correlation between the thermodynamic efficiency of machines and coal consumption - the rebound effect” (Franco, 2018). This paradox is tremendously important in the current economic landscape due to similarities in the global industrial dependence on oil. The second law of thermodynamics stipulates that the consumption of a resource yields pollution, which, when applied to the Coal Question, entails that the environmental impact of industrial activity will augment alongside population, consumption and/or technologies (Polimeni, 2006). The production line integrated intermediate goods as labour were increasingly divided, which snowballed into even greater pollution levels. Current macro-economists suggest amplifying this paradoxical trend as the income effect increases the quantity demanded of the resource and the quality demanded; the paradox proffers a spiral terminable only by the depletion of that resource (Polimeni, 2006).
The neoclassical framework pivoted attention from production to exchange and growth to allocation. Schabas notes the “denaturalization” of economics from the classical to the neoclassical period, as “subsequent economists (...) took man out of nature”, as “the economy was seen as a result of rational agency, no longer directly governed by natural forces.” (Schabas, 2005). Although economics became increasingly scientific and abstract during this time, some economists continued to examine reality. Among these were Pigou, and his renowned professor, Alfred Marshall. By considering the evolutionary mindset of Marshall, real strides were made in EET. This mindset reflects his wariness of the Walrasian-mechanistic approach to economics, which to a similar extent, has been mirrored by the schism between ecological economists and their mainstream colleagues (Dow, 2022). Marshall treated the economy and the natural climate as variables of a larger equation, a mindset mimicked by the ecological economists' core distinction between broader development and shallower growth. Marshall’s concept of order in the evolutionary process demonstrates his departure from the assumption of consumption maximization when studying the “aim of steady-state development” (Dow, 2022). As a student of Marshall at King’s College of Cambridge, Pigou also offered much to the groundwork of modern EET, even though he never deviated from the mechanistic approach to economics. Instead, Pigou pursued Jevons’ analysis within the marginalist framework, building on Marshallian concepts of external economies and diseconomies (Spash, 2012). Pigou furthered the notions by absorbing the “consequences of market decisions which are not themselves marketed”, such as the depletion of non-renewable energy or the impact of its waste (Dow, 2022). For the first time in economic history, pollution was quantified as a consequence of economic activity. Overall, neoclassical economics applied the instruments honed by Marshall to their abstract economies and referred to environmental consequences as “negative externalities requiring (...) correction” (Dow, 2022). A modern reading of Marshall evaluates his evolutionary paradigm and reveals the connections between his open-system approach and the biophysical attitude of modern EET.
Franco considers the early history of his field as spanning between 1880 and 1930 when intellectual diversity emerged regarding the determinant role of energy in cultural development and subsequent normative policy diagnosis. Eduard Sacher (1834-1903) pioneered energy accounting, a task of significant importance in the field today. He offered a comprehensive description of economic development as the “human pursuit for the greatest possible amount of energy available in nature”, insinuating a positive correlation between cultural development and energy availability (Franco, 2018). Marxian EET proposed less reductionist views of the role of energy, a school primarily advanced in the early 20th Century Soviet Union. Podolinsky was the first to explain how “energy efficiency applied to energetic inputs in land use” and human labour (Franco, 2018). He claimed that the energetic productivity of labour must be equal to or greater than the energetic cost to workers, an equation now referred to as the “principle of Podolinsky” (Franco, 2018). Making use of this principle, Alexander Bogdanov, Nikolai Bukharin and Vladimir Stanchinskii suggested that “energy exchanges between society and nature would allow social reproduction” (Franco, 2018). Although the Marxian ecologists were more nuanced than Sacher, they were also targeted by Otto Neurath. John Ruskin, Patrick Geddes and Lancelot Hogben for their energy reductionism. This opposition is best encapsulated by the “unified science” of Neurath, an ideal economic science in which various forms of deductive questioning would bind to allow a more pragmatic conception of reality (Franco, 2018).
Acknowledging the biophysical approach’s influence on cultural development yielded a variety of prescriptions and normative solutions, boiled down to “ecological utopians, technocrats and social Darwinists”; Hayek coined these thinkers “neo-Saint-Simonian social engineers” (V. Hayek, 1941). Ecological utopians were the closest to the heterodox approach to ecological economics held by Chinese philosophers and thinkers such as Wordsworth. These Socialist Energisticists favored an egalitarian form of social organization which operates within the boundaries of nature (Franco, 2018). Deriving from Walrasian thought, theorists such as Popper-Lynkeus (1838-1929) grounded their diagnosis in terms of the demand for food, claiming that markets were not designed to be universal but instead restricted to specific commodities and subjected to a degree of regulation (Franco, 2018). Frederick Soddy (1877-1956) continued these criticisms of mainstream economics, revising the Keynesian assumption that “economic growth was based on the optimistic assumption of a continuously better future” instead of being bound by the laws of thermodynamics (Franco, 2018). Moreover, the Technocrats, a movement launched by Howard Scott in the 1930s United States, focus on the plentitude of natural endowment, wary of resource depletion bringing about a “dragging effective demand” instead of the restrictions to production capabilities (Franco, 2018).
The lag in demand would result in a society dependent on debt as a source of wealth, which would cause social insecurity. Finally, the Social Darwinists tied energetics to the evolution of human groups. They posited a theory of competition-induced energy maximization between these groups reminiscent of the subsistence theory championed by Malthusian and Ricardian ideology. These views represent highly juxtaposed societal visions with Ecological Utopians stipulating equality and social Darwinists advocating for “survival of the fittest” (Franco, 2018). In their world, the Technocrats’ cornucopian ideology warranted an “ideal technocratic bureaucracy” to respond to social insecurity exacerbated by energy insufficiency (Franco, 2018). All in all, the biophysical approach to the history of EET displays the diversity of opinion on the importance of energy in cultural development and the policy prescriptions that ensued. This debate represented what could be termed the first wave of ecological thinkers in modern economics.
The second wave of ecological economists was established and publicized by the relationships between the thinkers Herman Daly, AnnMari Jansson, Robert Costanza, and Joan Martinez-Alier. The first of these modern ecological economists was Herman Daly, who pursued development problems in economics as his academic interest. Influenced by Georgescu-Roegen at Vanderbilt University, who notably focused his research around energy quality, labour productivity, the efficiency of food production systems and increasing energy costs. Under his tutelage, Daly realized his differences from mainstream environmentalists and resource economists. Although the distinctions between environmentalism and ecologism have been blurred through this study of EET, Daly was the first to inject biological evaluations into economics (Røpke, 2004). Laws of thermodynamics were indulged as catalysts in economic thinking for an earlier century, but Daly stressed the importance of veering away from the political environmentalism that surfaced in the 1960s. The zoologist Ann Mari Jansson offered much in the research of green algae of the Baltic Sea, which was aggrandized abnormally due to pollution. Close to Daly, they provided the first transdisciplinary study malleating their framework in the convergence of economics and ecological biology (Røpke, 2004).
Robert Costanza added to the second generation of ecological economists with his expertise in architecture. His contributions included incorporating systems modeling, and the relationship between embodied energy and value results conveyed through aerial photography of the wetlands in South Florida (Røpke, 2004). His immersion in the economic discipline came from the mentorship he received from Daly at LSU. Finally, the official establishment of ecological economics came from the works of Joan Martinez-Alier. Initially studying agricultural economics in 1960s Spain, he became versed in the works of Podolinksy and Soddy at Oxford University, where he corresponded with Daly Martinez-Alier and came to write the magnum opus of ecological economics in 1987 (Alier, 1990). Perhaps less inspiring than the works of the classical and marginalists, what came to be known as the second generation of economic ecological science formalized the discipline and blended ecology and economics sufficiently to establish a coherent scientific paradigm, a feat not achieved by previous eras.
Enter Samir Amin
This study of EET has taken pride in noting the importance of paradigms so far excluded from the frame of its history. In the 1970s, as academia was flooded by an array of Arab thinkers, the most celebrated of these provided insights into the EET from the post-colonial perspective. Samir Amin (1938-2018) was set apart by his theory of delinking, understood as the “necessary response to how the law of value and accumulation on a world scale create core and peripheries” (Ajl, 2020). The accumulation of wealth was auto-centric for Amin, subordinating other “periphery markets” to the social formation’s needs and logic of internal accumulation (Halsall). Amin maintained an early relationship with the luminaries of global development, using collective works to emphasize the urgency of the climate issue and devising a response that would not impede upon the development of periphery nations. This meant, for Amin, that the price structure signified that periphery regions would unevenly accumulate waste as the global economic activity was auto-centric (Ajl, 2020). Amin maintained this tension on capitalism until late in life, understanding that the economic order and its valuation system were incompatible with the wealth of the environment, prefiguring “ecologically uneven exchange” (Ajl, 2020).
History Revised
This paper has provided a historical account of ecological economic thought, illustrating the germination of the discipline in the Classical and Neoclassical movements and its transdisciplinary blossoming, charted first by economists and in later generations integrating scientific paradigms. Alongside its mainstream historical progression, Wordsworth, Chinese moralism, and post-colonial panjandrum, Samir Amin, offer an alternative understanding of nature, enabling a unique insight into the causes of environmental problems and the blindspots of the current ecological framework. Appreciating the variety of philosophical foundations in ecological economics sheds light on the context in which scientific research is set. Thus, ecological economics should broadcast its philosophical and ethical underpinnings far more rigorously in the scope of its study.
By Gabriel Fanchini for ECON 460: History of Thought I
Edited by Estella Lamarche-Dykeman, Romain Perusat, & Ava Liang
References
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Appendix
William Wordsworth, extract from Book Seventh, The Prelude (line 200 onwards)
A work completed to our hands, that lays,
If any spectacle on earth can do,
The whole creative powers of man asleep!—
For once, the Muse's help will we implore,
And she shall lodge us, wafted on her wings,
Above the press and danger of the crowd,
Upon some showman's platform. What a shock
For eyes and ears! what anarchy and din,
Barbarian and infernal,—a phantasma,
Monstrous in colour, motion, shape, sight, sound!
Below, the open space, through every nook
Of the wide area, twinkles, is alive
With heads; the midway region, and above,
Is thronged with staring pictures and huge scrolls,
Dumb proclamations of the Prodigies;
With chattering monkeys dangling from their poles,
And children whirling in their roundabouts;
With those that stretch the neck and strain the eyes,
And crack the voice in rivalship, the crowd
Inviting; with buffoons against buffoons
Grimacing, writhing, screaming,—him who grinds
The hurdy-gurdy, at the fiddle weaves,
Rattles the salt-box, thumps the kettle-drum,
And him who at the trumpet puffs his cheeks,
The silver-collared Negro with his timbrel,
Equestrians, tumblers, women, girls, and boys,
Blue-breeched, pink-vested, with high-towering plumes.—
All moveables of wonder, from all parts,
Are here—Albinos, painted Indians, Dwarfs,
The Horse of knowledge, and the learned Pig,
The Stone-eater, the man that swallows fire,
Giants, Ventriloquists, the Invisible Girl,
The Bust that speaks and moves its goggling eyes,
The Wax-work, Clock-work, all the marvellous craft
Of modern Merlins, Wild Beasts, Puppet-shows,
All out-o'-the-way, far-fetched, perverted things,
All freaks of nature, all Promethean thoughts
Of man, his dullness, madness, and their feats
All jumbled up together, to compose
A Parliament of Monsters. Tents and Booths
Meanwhile, as if the whole were one vast mill,
Are vomiting, receiving on all sides,
Men, Women, three-years' Children, Babes in arms.