Environment & the World

Wednesday, November 22, 2006

More Thoughts on Environmentalism and Economics

Filed under: Economics — amirj @ 2:47 pm

In the last few weeks, we’ve developed a little discussion about the tension between environmentalism and economics and the role of the latter in modern-day decision making. In Cathy’s last post on the issue, she wondered whether any viable alternatives to environmental economics exist, writing,

“In the long term, maybe we don’t want to live in a world where environmental decisions and plans are made on the basis of this sort of analysis.  But what would that world look like and how would we get there?  I have no idea…  It seems unlikely to me that we will ever find anything better than a market-oriented economy, and if that is the case, we will always be plagued by this question of assigning dollar values to nature. ”

When I think about this unresolved problem, I often reach the same conclusion as Cathy. It’s not, however, one that I can readily embrace. Perhaps this is because I fear that to let market capitalism progressively cannibalize the decision-making process in every arena in this world would perpetuate a downward hegemonic spiral that got us to this point and would leave even the best-intentioned among us uncomfortably silent and inadvertently complicit in creating an odd new world order of corporate control, individual powerlessness, and environmental destruction.

However, taking a step back into the realm of idealism, I realize that this conclusion does not have to be inevitable. In fact, the main reason we probably imagine it to be so is because we are socialized into a market economy from birth. Thinking in these terms essentially becomes natural for us. All this is not to say that markets are evil or completely unnecessary. Indeed there are fucntions that markets can probably accomplish best, but that should not preclude us from determining when market-capitalism decision making reaches its limits and subsequently envisioning alternatives for other realms of decision making.

In the midst of thinking through these issues, I came across an essay by Jonathan Rowe on the blog onTheCommons.org. He writes about the famed economist Milton Friedman who recent passed away and reflects upon Friedman’s views and how they played out contemporary economics. Rowe’s cogent essay amounts to an undeniable indictment of the shortcomings of the market economics paradigm, which I would highly recommend reading in its entirety.

Rowe’s argument concerning Friedman’s beliefs is extremely relevant to our discussion. There’s tons of great stuff about the myth of the “rational” individual who only makes the best choices, economists’ appropriation of scientific objectivity and their abrogation of value-judgments, and the economics narrative that perpetuates a false notion that The Market fulfills “demands,” by producing “goods, services, and wealth”–never “disservices and illth.”

According to Rowe, Friedman argued there was no role for the concept of “need” in economics. Rowe’s treatment of this subject merits quoting at length because he sheds a bright light on alternatives to the market capitalism paradigm of economics. In particular, Rowe invites us to imagine what an economics of need would look like.

“If need is relevant to economics then clean air must be, and a healthy atmosphere. So too traditional Main Streets and the social interaction and cohesion they provide. Wal-Mart might provide more cash flow and GDP; but those Main Streets provide a benefit flow that Wal-Mart can’t.  The same can be said for an internet that is free of corporate enclosures, university research labs that are not beholden to corporate interest, a gene pool that no person or corporation owns.

If need matters then these must matter too because they meet real needs. That thought is truly threatening to those who think markets should be not just one thing but everything.  ‘Demand’ by definition channels the thought process into a market context.  Need by contrast opens up a wider realm of possibility.  This includes the possibility that the corporate market itself has been destroying the realm of productivity that meets needs that it – the market – can’t.

This realm – the commons — is not amenable to the conventional modes of economic measurement.  It does not work through the textbook ‘laws.’  Commons involve reciprocity, trust and social norms, rather than acquisitiveness and greed.  They provide stability and maturity to balance the market’s adolescent grasping; and they give expression to the ‘we’ side of human nature as opposed to the market’s relentless and solipsistic ‘me.'”

There you have it. A simple suggestion really–a society organized on reciprocity, trust, and social norms. Of course, this suggestion comes without complicated equations, and snazzy graphs, but perhaps that’s what’s so elegant about this proposal–that protecting our air, water, and land and providing for vital human needs requires no more than a different mindset.

This may seem like a wildly romantic notion to those entrenched in and deeply committed to upholding an economics of greed and endless capital accumulation. Moreover, the fact that much of our world is increasingly  becoming organized upon those principles does pose a challenge even to considering alternatives. But it should not lock us into thinking that translating common assets like clean air and water into commodities with a price tag is a way out of our 21st century conundrum–indeed it’s just a step back deeper into our problem.

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1 Comment »

  1. […] More Thoughts on Environmentalism and Economics […]

    Pingback by Is “Command and Control” Really so Bad? « Environment & the World — Sunday, November 26, 2006 @ 4:39 pm


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