By David Barkin
Ecological Economics (EE) is an evolving heterodox field of study which has brought together knowledge from various social and natural sciences to question the two fundamental dogmas of neoclassical Economics: methodological individualism and the supremacy of the market.
The idea of methodological individualism assumes that individuals make autonomous decisions about their needs and formulate demands on that basis, constrained only by their incomes. Similarly, entrepreneurs shape their programs based on existing technologies and information about the markets for their products, with incentives to increase productivity through innovation that will permit them to gain greater market shares in an environment in which all compete on an “even playing field.”
The premise of the supremacy of the market is that it is possible to reduce all economic transactions and resources to a common denominator -prices- that reflect their relative worth and scarcity. The dominant neoclassical teaching and analysis of economics is firmly grounded on the presumption that a smoothly operating market system will produce equilibrium solutions that will assure maximum levels of efficiency and welfare, given the existing distribution of wealth and control over resources.
The Fundamentals of Ecological Economics
In contrast to the above-mentioned tenets of neoclassical economics, Ecological Economics has embraced a collective approach that envisions consumers and producers making decisions with reference to the social groups to which they belong. This change in focus has profound implications for our understanding of the way in which societies function and the decisions they make about their organizations, including relationships among their members and within their groups, as well as the allocation of their resources. The alternative paradigm was strengthened with the path-breaking work of Elinor Ostrom who received a Nobel Prize for her analysis of the ability of communities to manage effectively their common resources for their own welfare while assuring their conservation.
The intellectual roots of Ecological Economics stretch back to the work of Karl Marx and Karl Polanyi who tried to parse and interpret the structural change in society that occurred with the emergence of capitalism. In contrast to earlier societies in which productive activities and market transactions were firmly embedded in the social fabric of which they were a part, in the new system the economy was violently wrenched from its social institutions, creating alienated workers, private property of land and natural resources, and a different form of money that could serve as a means of dominion over society itself. Alarmed by the economic disarray and the social ferment that capitalism had forced upon the society, as well as the degradation of the planet itself, (even though they were analyzing these developments almost seven decades apart from each other), both Marx and Polanyi forcefully argued that it would not be possible to confront these powerful forces unless we could find means to integrate production once again within society and nature.
A further contribution to the development of EE was made later in the 20th century by Nicholas Georgescu-Roegen who focused on the decreasing carrying capacity of Earth to sustain human populations and consumption levels. He called it the increasing entropy of the earth, borrowing the term from thermodynamics. EE, thus, advocates the redesigning of production itself to preserve its renewable resources while also caring for its non-renewable treasure trove to ensure a healthy environment. It emphasizes the need for limits to be placed on human activities, raising ethical questions of respect for people and the environment as well as the responsibility of producers to ensure the appropriate and wholesome availability of products.
EE and Endless Growth
Another important neoclassical dogma, which EE has profoundly challenged, is that of “endless growth”. Modern economic thinking is contingent on the promotion of growth and its very integrity is threatened when the pace of growth declines. The “Limits to Growth” study conducted by the Club of Rome in 1972 underlined the central point advanced also by EE that “the earth is finite” and the pursuit of unlimited growth would eventually lead to a breakdown in earth’s economic and ecological systems. The study used data available in 1970 on industrialization, population, food, resource use and pollution projecting a range of scenarios out to 2100. Its prediction under a “business as usual” scenario in which humanity took no serious action on environmental and resource use was quite grim and chilling, stating clearly that the system would “overshoot and collapse”. The predictable response from neoclassical economics to the “Limits to Growth” study was, and has been, obdurate and unwavering – it completely rejects the existence of any constraints on human activity. In fact, for Capitalism, built around the idea of growth in sales, markets, earnings, assets and stock indices, the quest for the next high is the primary objective of the economic system.
As society grapples with the rigid insistence on growth by neoclassical economists as well as the dire predictions of systemic collapse by the “limits to growth” postulate, a new movement called “Degrowth” has generated a great deal of activity and some analysis by social scientists, particularly in Europe. Its proponents have advanced the idea that it is possible to avoid a systemic collapse on Earth by contracting the economy in a planned and equitable manner so that the planet gets back to operating within its natural limits and its regenerative capacity. Currently, according to the Global Footprint Network, which keeps an eye on the ecological footprint of various human activities and the overall biocapacity of the earth, the equivalent of 1.7 planets would be required to produce enough to meet the demands of modern living. This acute burden on the planetary resources needs to be considered in the context of the sobering reality that nearly half of the world’s population still lives on less than $2.50 per day. One can barely imagine the assault on Earth if this huge mass was to attain the same resource intensive lifestyle that the industrialized west enjoys. The “Degrowth” initiative, consequently, advocates going through a deliberative process at the community and societal levels to figure out how much is enough to live well, particularly in the west, and then create an economy based on sufficiency. Its emphasis is on confronting the stilting societal addiction to consumerism and, in fact, slowing down the rate at which we convert nature into stuff, and in the process decrease the global carbon and material footprint.
The Ethical Imperative
It is now clear that society will have to place limits on itself, but conventional science is proving incapable of defining those limits or reducing the profound social inequities that plague today’s economy. EE could be the discipline with which to address these challenges. That resolve has taken this field of study into the realm of social justice, given that the system built on the fundamentals of neoclassical economics is only facilitating the concentration of wealth and extreme luxury on the one hand and extreme poverty on the other, ultimately leading to abuse of the environment by both groups. EE is learning from the growing resistance to the calamities being inflicted on communities worldwide by capitalism in its various forms. Innovative movements against neo-extractivism, assertion of autonomy and traditional rights by indigenous people, women’s movements for empowerment, are all guiding EE to incorporate into its analytical model attempts at forging new social and economic structures that offer more opportunities for people as well as greater liberty to ensure the sustainable conservation of their ecosystems.
Another ethical dimension in which EE is exercising an influence regards the treatment of time in economic analysis. There is a growing recognition that the present practice to penalize future generations by applying a discount rate to the flow of future benefits is not an appropriate way to balance the solution of today’s problems with provisions for the coming generations. EE has committed itself to the belief that protecting the environment or providing for the well being of others in the future is not a matter of sacrifice for the present generations, rather an extremely crucial responsibility for them.
EE In Progressive Practice
In many parts of the world people are trying to move beyond the confines of their existing relations with the capitalist societies. Communities are realizing that they can be better off by taking control over their territories and organizing themselves collectively to assure the production of their needs and the conservation of their environments through direct democracy. As part of its progressive commitment, EE is advancing alternative rights-based approaches to defend territories and promoting local strategies for well being, in contrast to the market-based solutions offered by economists and the international community.
A unique feature of the approach of many of these societies is an explicit recognition of the centrality of surplus in their strategies. By focusing on the control of the various sources of surplus produced by, and available to them, they are able to effectively distribute it for individual and collective purposes while avoiding the concentration of income and power characteristic of the structures of the society they are trying to replace. EE is helping eliminate capitalist market tethers so that societies can identify important reserves of untapped resources available for collective benefit. It is remarkable how many communities are implementing mechanisms to identify them, while also organizing activities that generate additional surplus
A growing number of academics and activists involved with EE, especially in the Global South, are involved in efforts to support people attempting to avoid their insertion into global markets on disadvantageous terms. Resistance movements are transforming themselves into creative and powerful initiatives, designing alternative strategies for social and productive organization consistent with assuring ecosystem conservation and balance. This is where EE is making a particularly important contribution, collaborating to understand the environmental processes and participate in developing new productive activities.
The Via Campesina (VC) is the largest social organization proposing an alternative organization of production around the principle of Food Sovereignty. It brings together affiliates in more than 70 countries with more than 200 million members, creating local systems for sustainable food production. Since its founding in 1993, it has moved to generate new ways of disseminating information and strengthening its commitment to peasant based production oriented to supplying local markets, using agroecological farming systems suitably adapted to local environmental conditions. The VC also sponsors a network of peasant-to-peasant schools where people exchange information and teach about different farming techniques, while also trading seeds and information about markets, credit systems, and outside assistance.
Communities living in forest areas are also creating new ways of managing their resources to assure the long-term health of their ecosystems, while also generating employment and income to sustain themselves. There are numerous accounts of successful examples in which communities have organized to recuperate and then protect degraded or overcut systems while creating productive activities. Community control of water resources and costal fisheries also contribute to local well being, generating new productive activities and sources of income.
As EE partners this new search for alternatives, it is making a serious effort to escape from the strait jacket of mainstream analysis and try to understand and participate in the dynamic efforts to build new forms of society. These include the important example of the Zapatistas in southern Mexico, who are consolidating an experience of almost a quarter-century, consolidating their unique approach to economic and ecosystem management that has improved the material well-being of the more than one-half million people living in its territory, while assuring privileged opportunities for women and schooling for all. In other parts of Latin America, communities are also moving from “resistance” to “r-existence”, as some have recently described this transformation.
EE is clearly a contested field of work for economists. Many still insist on simply transferring mainstream paradigms to the problems of the relationship between society, economy and nature. But, the rampant economic inequality in society and the accompanying environmental destruction oblige us to reexamine our understanding of social relations along with the connections between the economy, society and nature, placing power at the center of our analysis. While some would have us believe that EE can provide a blueprint for “sustainable development,” many of us would prefer to understand it as an approach for empowering peoples, generating a diversity of strategies for improving the quality of life and conserving the ecosystems on which we all depend. It is about time we integrate EE and political ecology, areas that have been artificially separated, moving beyond the “economistic” analysis that has dominated the analytical paradigm till now.
Georgescu-Roegen, Nicolas. 1971. The Entropy Law and the Economic Process. Boston, MA: Harvard University Press.
Marx, Karl y Frederick Engels. 1848. Manifesto of the Communist Party. Available at: https://www.marxists.org/archive/marx/works/1848/communist-manifesto/
Meadows, Donella H., Dennis L. Meadows, Jorgen Randers, and William W. Beherns. 1972. The Limits to Growth: A report to the Club of Rome. New York: Universe Books.
Ostrom, Elinor. 1990. Governing the Commons: The evolution of institutions for collective action. New York: Cambridge University Press.
Polanyi, Karl. 2001. The Great Transformation: The political and economic origins of our time. Boston, MA: Beacon Press.
Dr. David Barkin is Professor of Economics at the Xochimilco Campus of the Universidad Autónoma Metropolitana in México City. He received his doctorate in economics from Yale University and was awarded the National Prize in Political Economics in 1979 for his analysis of inflation in Mexico. Dr. Barkin is a member of the Mexican Academy of Sciences and of the National Research Council. In 1974, he was a founding member of the Ecodevelopment Center. Dr. Barkin is interested in the process of unequal development that creates profound imbalances throughout society and promotes environmental degradation. His recent research focuses on the implementation of alternative strategies for the sustainable management of resources. Much of his work is conducted in collaboration with local communities and regional citizens’ groups. Dr. Barkin’s most recent books include: Wealth, Poverty and Sustainable Development and Innovaciones Mexicanas en el Manejo del Agua. (Mexican Innovations in Water Management).