Routledge Handbook of Ecological Economics

Nature and Society

Clive L. Spash

• Publisher: Taylor & Francis
• Year: 2017
• eBook ISBN: 9781317395096
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Since becoming formally established with an international academic society in the late 1980s, ecological economics has advanced understanding of the interactions between social and biophysical reality. It initially combined questioning of the basis of mainstream economics with a concern for environmental degradation and limits to growth, but has now advanced well beyond critique into theoretical, analytical and policy alternatives. Social ecological economics and transformation to an alternative future now form core ideas in an interdisciplinary approach combining insights from a range of disciplines including heterodox economics, political ecology, sociology, political science, social psychology, applied philosophy, environmental ethics and a range of natural sciences.

This handbook, edited by a leading figure in the field, demonstrates the dynamism of ecological economics in a wide-ranging collection of state-of-the-art essays. Containing contributions from an array of international researchers who are pushing the boundaries of the field, the Routledge Handbook of Ecological Economics showcases the diversity of the field and points the way forward. A critical analytical perspective is combined with realism about how economic systems operate and their essential connection to the natural world and society. This provides a rich understanding of how biophysical reality relates to and integrates with social reality. Chapters provide succinct overviews of the literature covering a range of subject areas including: heterodox thought on the environment; society, power and politics, markets and consumption; value and ethics; science and society; methods for evaluation and policy analysis; policy challenges; and the future post-growth society. The rich contents dispel the myth of there being no alternatives to current economic thought and the political economy it supports.

The Routledge Handbook of Ecological Economics provides a guide to the literature on ecological economics in an informative and easily accessible form. It is essential reading for those interested in exploring and understanding the interactions between the social, ecological and economic and is an important resource for those interested in fields such as: human ecology, political ecology, environmental politics, human geography, environmental management, environmental evaluation, future and transition studies, environmental policy, development studies and heterodox economics.

1
SOCIAL ECOLOGICAL ECONOMICS

Clive L. Spash

Introduction

Social ecological economists have been present since the creation of the International Society for Ecological Economics (ISEE) and provide the main approach in the European Society for Ecological Economics (ESEE) (Røpke, 2005; Spash, 1999). They recognise the importance of political economy, social ecology and the role of institutions for understanding the economic system and its interactions with Nature. They practice serious interdisciplinary knowledge integration across social and natural sciences (Spash, 2012a). They realise the need for a radical social ecological transformation based on their (natural and social) scientific knowledge. Social ecological economics is for many the core understanding of ecological economics (Spash, 2013; Spash and Ryan, 2012).

Ecological economics was founded upon the importance of placing the economy within its biophysical limits, while recognising the need for the conduct of human society to respect others both present and future, human and non-human. Key concerns included the failures of economic policy to address environmental impacts and the existing economic structure and its institutions to meet minimal standards of ethical conduct. However, different forces have shaped how the field of knowledge has combined topics and addressed (or not) these various issues. In particular, the gradual but persistent neoliberalisation of society since the 1980s has pushed an ecologically informed environmental policy discourse into the language of economics and finance (Spash and Aslaksen, 2015). The result has been a mainstreaming of environmentalism in general and ecological economics in particular (Spash, 2013). Economics has become identified with what Polanyi (1957) termed ‘formal economics’, where a narrow market exchange model dominates, a model that misconstrues the historical meaning of markets, trade and money, and so is blind to the potential alternative forms of social integration and organisation. Many have lost their way due to the supposed necessity of being pragmatic in terms of adopting formal economic concepts, converting Nature into capital, ecosystem functions into goods and services, and pollution into a traded commodity. Explicit ethical judgement is replaced by the dogma of saving money to meet an ill-defined goal of economic efficiency, as if this had no ethical implications.

If the journal of the name Ecological Economics is taken as an indicator, then the field is disunited, conflicted and internally self-contradictory. This situation occurs because the journal was allowed to become a commercial project of Elsevier, expanding rapidly beyond the ability of meaningful content to be provided by the fledgling ecological economics community of the early 1990s, with its anti-establishment concerns for limits to material and energy throughput and restricting the scale of the economy. Success measured by publishers’ citation metrics, growth and returns are ironically what has determined the content, while quality in production has declined and academic direction is lacking. In the process, the journal has become a contested space in which mainstream environmental and resource economists fight to obtain kudos through formal models and monetary valuation studies, while new environmental pragmatists compete to find the easiest formulae for supplying palatable messages in the hope of courting unconcerned corporations and unconscious consumers (Spash, 2013). The foundational social ecological ideas are lost in the mix. A good example is coverage of climate change in the journal, a discussion that largely ignores key contributions from the field and instead conducts a formal mainstream economic discourse (Anderson and M’Gonigle, 2012). The editors seem oblivious to the need for getting contributors to actually read or address the relevant ecological economics literature. Thus, core papers, arguments and critiques run in parallel with a mass of totally separate formal economic, and other, content that ignores the essence of ecological economics, its concepts and their meaning.

One result of the neoliberalisation of environmentalism, and the adoption of concepts from formal economics, is the increasing prevalence of pseudoscience, especially in the form of numbers. This is evident in natural scientists adopting whatever aspects of social science appear to them to be convenient. A typical approach is creating money numbers from thin air in the vain hope of impressing the mythical decision-maker and general public that the environment matters (Spash, 2013; Spash and Vatn, 2006). Along the way the importance of social science is downplayed, and often treated as some simple add-on to the ‘objective’ natural science information that is believed to supply all we really need to know. Inevitably the division between environmental and social concerns has grown as the expression of plural values and complexity are replaced by monistic measures and simple messages. Perversely, the politically naïve use of formal economic language, concepts and methods by ecologists and conservation biologists has undercut their own message, disempowered their policy relevance and damaged the environmental movement in the process (e.g., in the area of biodiversity, see Spash, 2015a). Rather than progress in uniting an understanding of the biophysical, social and economic, what we have seen is the domination of the social and biophysical by a narrow discourse that reduces everything to exchange in price-making markets.

Social ecological economics is then a call for the interdisciplinary reunification of different bodies of knowledge in a way that reflects their competencies in relation to the objects they study (Spash, 2012a). The social, in social ecological economics, emphasises the necessity of understanding the reality of how humans and their societies operate if we are to gain any insight concerning the multiple crises into which the current system is plunging the world. Historical and descriptive analysis of the past and its institutions is essential to understanding the future and its potentiality (Spash, 2011).

Ecological economics lacks a coherent social theory and connection with other social scientists working on the same topics in other fields (e.g. political science, political ecology, sociology, social psychology, social anthropology). Some have felt threatened by the social and have downplayed if not derided its relevance. In the USA the social is quickly connected to socialism, which since McCarthyism has been associated with communism and branded as un-American. There have even been attempts to suppress those following the social ecological economics agenda within ecological economics itself, while promoting mainstream economists in their stead (Røpke, 2005; Spash, 2011). This suppression failed, not least because social and environmental problems are inseparable and formal economics is no substitute. Polanyi (1957) thought formal economics was valid in a restricted field of knowledge relating to nineteenth- and twentieth-century market economies. In contrast, I argue that it fails as either a description, explanation or predictor of the modern market economy, and as a result is dangerously misleading as a guide to social and environmental policy.

In this brief overview I will start by substantiating this last point, not least because there are too many apologists for mainstream thinking and the extent of economic inadequacies is not well or widely understood. This leads to the need for alternatives to current formal economic theories, but also to the current economic system it advocates with its pricing, capital accumulation, competition, growth and social and environmental exploitation. After dismissing the dominant economists’ defensive stance – that there are no alternatives – I explore in turn why the economy must be understood as a social ecology economy in biophysical and social terms. This is carried out by overviewing the environmental and social implications of the current economic system, its problematic elements and the biophysical and social implications of its operations. That sets the agenda for new directions and the needed research to achieve the necessary social ecological transformation.

Modern economics as a distraction from reality

Economics as a discipline has become a narrow prescriptive field which defines itself by its methodology rather than its content or object of study, namely the social economic system. To be an economist today means being able to abstract from reality using mathematical symbols to represent loosely defined concepts such as goods, services, labour, land, capital, prices, money, markets, trade, employment and utility. The approach employs deduction, which means the foundational axioms, and inferences drawn from them, have no requirement for realism at all. The inferences need only be logically drawn from the axioms and the derived equations and models internally consistent. On this basis the discipline has created a deductive dogma that is divorced from actual and empirical economic systems and their operations. This is something that is only disturbed by the invasion of reality into the economists’ closed world.

Reality comes in the form of economic collapse, misdirected policy and publicly visible ignorance. A financial disaster, such as the 1929 or 2008 crashes, brings home to many (otherwise generally unconcerned) citizens of industrially modernised economies how economics has become detached from the reality it is supposed to explain and the future it promises to predict. Yet, the economics profession seems to remain amazingly untouched by the irrelevance of their own theories. Like the neoliberals, who created the 2008 crash and ongoing world economic crisis through deregulation and financial greed, the majority of economists continue to recommend price-making market mechanisms on the basis of arguments that have no relationship to real markets and their operation. They justify passing power to the least trustworthy without even realising this because their models have no concept of power. If they did, their dogmatic commitment to mathematical formalism would make it merely another symbol in an equation of little practical consequence. They make recommendations for society on the basis of a discipline that has no theory of society, nor indeed any conception of social structure, but rather merely regards society as an aggregation of individual agents, each pursuing their own self-interest (i.e. methodological individualism).

Microeconomics, based on preference utilitarianism, regards humans as optimising machines whose decisions leave no room for emotion, psychology or social embeddedness. Homo Œconomicus is an automaton, maximising utility on the basis of a preordained set of preferences. If such individuals existed, they would have no freedom to choose because all their choices would be preprogrammed; they would merely execute the optimising rule. This machine-like human is matched by a similar model of the business enterprise or firm. Firms are assumed to merely execute a rule of profit maximisation. They have no structure, no people, and no institutions within which they operate and of which they are constructed. They are involved in no struggles over ownership of the means of production nor concerns over exploitation, no lobbying of politicians nor regulatory capture of government agencies. There is nothing like a multinational corporation in the microeconomic literature, let alone the aggressive mining industry, fossil fuel sector, petrochemical and agro-industries, loggers, aerospace/telecommunications/computing/robotics industrial–military complex, soft drinks and fast food franchises, supermarket chains, property developers, building contractors, speculators, stock traders, bankers and financiers. Accordingly, there is no theory of cost-shifting enterprises that deliberately harm others in order to profit themselves (see Kapp, 1978), but instead the dominant characterisation of firms is as neutral agents of production at the service of the sovereign consumer (Fellner and Spash, 2015). Economic theory explains systemic failures as externally caused and so absolves economic agents of responsibility. Thus, pollution is termed an ‘externality’ that is only problematic because it lies outside the pricing system of which firms are mere functionaries. The historical development of the modern economy, dominated by corporations and the financial sector, is as inexplicable for the economist trained in modern theory as is the necessity of a biophysical reality.

Macroeconomics is just as unreal and ontologically flawed. The basic economic model that underlies all macro-theory assumes a totally isolated economic system with no inputs and no outputs of either materials or energy. There is only a flow of goods and services between firms and households. Households supply labour to firms and get paid; they in turn demand goods and services for which they pay. Physical flows in one direction are matched by monetary flows in the other. Economic growth is merely how fast the flows occur. In this ontology the presumption is that economic reality consists only of the firm and household and their exchanges, and economic growth can go on forever as an exchange between the two. Nothing could be more utopian. Sophisticated models may add a government sector, although the major concern has increasingly become that such a sector is problematic for an efficient economy and its role should be minimised. Treasury models have no banking or finance sector and cannot then say anything about the need for their regulation. Instead government must take the blame for financial crises and be cut back through austerity measures. The focus, whether orthodox or heterodox macroeconomics, is upon a utopian economy of production, growth and capital accumulation. All else is secondary or treated as of no consequence.

Paradoxically, the very irrelevance of modern economics as a means for understanding the functioning of the economy is why it can exist. It is harmless for key power interests, namely a political elite, the rich and multinational corporations. They can use its models and concepts as rhetorical devices when convenient and ignore them just as easily. Yet, the paucity of economic analysis has real implications because it supports claims such as: all is well with the world, there is such a thing as an efficient competitive economy, the rich deserve their wealth, corporations are a valid and good institution, markets supply freedom and economic growth will eradicate poverty. The world is defined as a market economy that is the highest form of human evolution. This results in the propaganda slogan that “there is no alternative” to the capital accumulating market economy driven by competition, innovation, technology and the desire for ever more material affluence.

If you spend time engaging with the economics profession, and the related defenders of faith in the current economic system, there will repeatedly be points at which they are forced to admit the validity of criticisms of both their own economic understanding and the current political economy. In fact they will admit so many criticisms as to leave no doubt that an alternative to both should be adopted. However, their last line of defence is that there is nothing better to replace the existing approach, that alternatives have been tried and failed, and while things are bad, the alternatives are much worse. In terms of supporting the current economic system their arguments will cite the failures of the Soviet Union, the bureaucracy of planning systems, the inefficiency of barter, and so on. Defence through this means of rhetoric aims to divert attention from the actual economic system and claim all its flaws must be accepted because nothing else can be done.

Can you imagine a bridge built with poor materials and structural flaws and yet being defended on such a logic? Who would trust an engineer who admitted their bridge was clearly defective, and also prone to collapse, but argued you should still use it because there is nothing better available, or we tried boats in the past but they were less efficient. Following economists, the engineer could respond to those exposing the dangers of the bridge by saying: ‘you are not experts so what do you know?’ and ‘you have no right to criticise my structure before building your own and showing it is better’.

The logic of these arguments, as commonly employed by economists, is as flawed as the theory and system they try to defend. There is no onus on somebody pointing out the failings of either the economics profession or the management of the economy to keep quiet because they have not written an alternative textbook or constructed their own economic theory. At the same time these defensive arguments are unscientific and aim to divert attention away from seeking legitimate alternatives. They paint the attempts to pursue alternative economic systems in the worst possible light, without actually taking any time to research them. They attribute to all alternatives the word ‘utopian’, as a derogatory expression, while ironically placing their own faith in a totally romantic utopia of modernist techno-optimism and ever expanding materialism. A scientific approach would explore potentialities, analyse alternative structures and question the necessity and usefulness of existing approaches. Most importantly it would relate to biophysical and social reality.

The social ecological economy

What is the aim of an economy? The typical answer to such a question revolves around resource allocation. Real economic systems move goods and services through a process of extraction, transportation, transformation and on to ‘final use’ by a range of social actors before returning all energy and materials to the environment. The complexity of the system of resource use is misleadingly simplified by reduction down to ‘production’ by a ‘firm’. Similarly, the range of social actors is not reducible to ‘consumers’, let alone sovereign ones (Fellner and Spash, 2015), but involves the government at multiple levels, the military, firms, corporations and social groups, as well as individuals. This social complexity requires institutions (i.e. conventions, norms, rules) for coordination and social integration. The institutions...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• Preface
• Dedication
• I Foundations
• 1 Social ecological economics
• 2 A critical and realist approach to ecological economics
• II Heterodox thought on the environment
• 3 Critical institutional economics
• 4 Political ecology and unequal exchange
• 5 Ecofeminism
• 6 Ecological marxism and ecological economics: from misunderstanding to meaningful dialogue
• 7 Post keynesian economics and sustainable development
• 8 Evolutionary economics
• III Biophysical reality and its implications
• 9 Thermodynamics: relevance, implications, misuse and ways forward
• 10 Geophysical limits, raw material use and their policy implications
• 11 Social metabolism
• 12 The biophysical realities of ecosystems
• 13 Coevolutionary social ecological economics
• IV Society, power and politics
• 14 Theories of power
• 15 The imperial mode of living
• 16 A guide to environmental justice movements and the language of ecological distribution conflicts
• 17 Social movements and resistance
• V Markets, production and consumption
• 18 Unregulated markets and the transformation of society
• 19 Theory of the firm
• 20 Theories of (un)sustainable consumption
• 21 Work and leisure: money, identity and playfulness
• Part VI Value and ethics
• 22 Pluralism and incommensurability
• 23 Intrinsic values and economic valuation
• 24 Needs as a central element of sustainable development
• 25 Future generations
• VII Science and society: uncertainty and precaution
• 26 Precautionary appraisal as a response to risk, uncertainty, ambiguity and ignorance
• 27 Safe minimum standards: addressing strong uncertainty
• 28 Post-normal science
• VIII Methods
• 29 The NUSAP approach to uncertainty appraisal and communication
• 30 Multiple criteria evaluation in environmental policy analysis
• 31 Multicriteria mapping
• 32 Q methodology
• 33 Participation in the context of ecological economics
• 34 Deliberative monetary valuation
• 35 Participatory modelling in ecological economics: lessons from practice
• 36 Input-output analysis
• 37 Sustainability indicators
• IX Policy challenges
• 38 Commons
• 39 Uneven development and resource extractivism in africa
• 40 Mining conflicts
• 41 Peak-Oil and ecological economics1
• 42 Human induced climate change from a political economy perspective
• 43 Ecosystem services
• X Future post-growth society
• 44 Degrowth and democracy
• 45 The steady state economy
• 46 Post-growth economics
• 47 The bioregional economy: celebrating the local in production and consumption
• 48 The coming sustainable city
• 49 Eco-social enterprises
• 50 Democracy, participation and social planning