In the future, economists will return to Earth
The year 2009 will witness a tsunami of economic appeals to fix, as disgraced Federal Reserve Chairman Alan Greenspan put it, the 'flaw' in their thinking. Most will get it wrong.
The proposals for bailouts, regulations, and government spending sprees all share one tragic flaw: They assume no physical or biological limits to human growth. Most economists cling to an 18th century mechanical universe that conjured an 'invisible hand' of God, which would allegedly convert private greed into public utopia.
Indeed, a few got rich but the meek inherit an Earth featuring child slavery, sweatshops, a billion starving people, toxic garbage heaps, dead rivers, exhausted aquifers, disappearing forests, depleted energy stores, lopped-off mountain tops, acid seas, melting glaciers, and an atmosphere heating up like a flambé.
Meanwhile, a rigorous sub-culture of scientists and economists have been working to free economics from its eighteenth century quagmire by reconciling human enterprise with the laws of physics, biology, and ecology.
Their time has come. This year, 2009, will signal the birth of a genuinely innovative economics that will eventually displace the patchwork rationalisations for greed. The new ecological accounting is variously called 'dynamic equilibrium', 'steady-state' or 'biophysical' economics.
What about technology?
Ignoring nature remains the tragic conceit of conventional economists, who presume we can grow our economies forever without regard to quantities of materials, energy, and pollution. Biophysical economics, on the other hand, acknowledges that there exist no cases in nature of unlimited growth.
Dr. Albert Bartlett, Emeritus Professor of Physics at Colorado University, urges economists to learn the laws of nature. Non-material values - creativity, dreams, love - may expand without limit, but materials and energy in the real world remain subject to the requirements of thermodynamics and biology. "Growth in population or rates of consumption cannot be sustained. Smart growth is better than dumb growth," says Bartlett, "but both destroy the environment."
What about technology? Some economists imagine that computer chips or nanotechnology will save us from the laws of nature, but every technical efficiency in history has resulted in more consumption of energy and resources, not less. Remember when computers were going to save paper? That never happened. Computers increased paper consumption from about 50 million tonnes annually in 1950 to 250 million tonnes today. Meanwhile, we lost 600 million hectares of forest.
Nor is the internet a celestial realm where ideas are exchanged for 'free'. Computers require copper, silicon, oil, toxic chemicals, massive energy for server networks, and garbage heaps for techno-trash. In every industrialised nation, energy and material consumption is increasing, not decreasing. Technology is not energy. It costs energy.
In the 1970s, World Bank economist Herman Daly wrote Steady-State Economics to outline the future of ecological economics. Daly makes a distinction between 'sustainable growth', which is 'impossible', and 'sustainable development', which is natural. "The larger system is the biosphere and the subsystem is the human economy," says Daly. "We can develop qualitatively, but we cannot grow beyond the biosphere's limits."
"We are dying of consumption," says Peter Dauvergne, sustainability advisor at UBC and author of The Shadows of Consumption. "The unequal globalisation of the costs of consumption is putting ecosystems and billions of people at risk."
To honestly achieve a "sustainable" economy, humanity must step through a paradigm shift, as profound as the transition in the sixteenth century when Copernicus showed that the Earth is not the centre of the universe. Likewise, ecology teaches us that humanity is not the centre of life on the planet. Just as the Pope's henchmen refused to look through Galileo's telescope, some economists avoid looking out the window to see what keeps humanity alive: photosynthesis, precious materials, and concentrated energy.
"Sooner or later," as ecologist David Abram puts it, "technological civilisation must accept the invitation of gravity and settle back … into the rhythms of a more-than-human Earth."