Growth, the Environment and Keynes: Reflections on Two Heterodox Schools of Thought

Spash, Clive L. and Schandl, Heinz (2009): Growth, the Environment and Keynes: Reflections on Two Heterodox Schools of Thought.

Abstract

This paper explores the approach of Post Keynesian Economics (PKE) in comparison with ecological economics. While PKE, like all macroeconomics, has failed to address environmental problems it does have many aspects which make compatibility with ecological economics seem feasible. Ecological economics has no specific macroeconomic approach although it has strong implications for economic growth and how this should be controlled, directed and in materials terms limited. We highlight growth as the key area of difference and reflect upon how Keynes himself saw capital accumulation as a means to an end not an end in itself, regarded it as a temporary measure and also was well aware of some of its psychological and social drawbacks.

• Item Type: MPRA Paper
• Language: English
• Keywords: heterodox economics, environment, Keynes, post keynesian economics, ecological economics, economic growth
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O44 - Environment and Growth; P - Economic Systems > P1 - Capitalist Systems > P16 - Political Economy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q0 - General > Q01 - Sustainable Development; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services ; Biodiversity Conservation ; Bioeconomics ; Industrial Ecology

References

Aldred, J. (2006) Incommensurability and monetary valuation. Land Economics 82(2): 141-161.

Anslow, M. (2008) The gathering brainstorm: Wifi. The Ecologist (January): 43-48.

Arestis, P. (1992) The Post-Keynesian Approach to Economics. Aldershot, England: Edward Elgar.

Ayres, R.U. (1990) Technological transformations and long waves. Part 1. Technological Forecasting and Social Change 37: 1-37.

Ayres, R.U. and Simonis, U.E. (eds.) (1994) Industrial Metabolism: Restructuring for Sustainable Development. Tokyo: United Nations University Press.

Brennan, A.J. (2008) Theoretical foundations of sustainable economic welfare indicators - ISEW and political economy of the disembedded system. Ecological Economics 67(1): 1-19.

Common, M. and Perrings, C. (1992) Towards an ecological economics of sustainability. Ecological Economics 6: 7-34.

Cunfer, G. (2005) On the Great Plains: Agriculture and environment. College Station: Texas A&M University Press.

Daly, H.E. (1977) Steady-State Economics. San Francisco, California: W H Freeman.

Daly, H.E. (1991) Towards an environmental macroeconomics. Land Economics 67(2): 255-259.

Davidson, P. (1981) Post Keynesian Economics: Solving the Crisis in Economic Theory. The Crisis in Economic Theory. D. Bell and I. Kristol (eds.). New York: Basic Books Inc: 151-173.

Dryzek, J.S. (1992) Ecology and discursive democracy: Beyond liberal capitalism and the administrative state. Capitalism, Nature and Socialism 3: 18-42.

Dunn, S.P. and Pressman, S. (2005) The economic contributions of John Kenneth Galbraith. Journal of Post Keynesian Economics 17(2): 161-209.

Dunn, S.P. and Pressman, S. (2006) The lasting economic contributions of John Kenneth Galbraith, 1908-2006. Journal of Post Keynesian Economics 29(2): 179-190.

Earl, P.E. (1990) Economics and psychology: A survey. Economic Journal 100(402): 718-755.

Earl, P.E. (2005) Economics and psychology in the Twenty-First Century. Cambridge Journal of Economics 29(6): 909-926.

Easterlin, R.A. (1974) Does economic growth improve the human lot? Some empirical evidence. Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz. P. A. David and M. W. Reder (eds.). New York: Academic Press: 98-125.

Easterlin, R.A. (1995) Will raising the income for all increase the happiness for all? Journal of Economic Behavior and Organization 27(1): 35-47.

Easterlin, R.A. (2003) Explaining happiness. Proceedings of the National Academy of Sciences (PNAS) 100(19): 11176-11183.

Ekins, P. (1992) A four-capital model of wealth creation. Real-life Economics: Understanding Wealth Creation. P. Ekins and M. Max-Neef (eds.). London: Routledge: 147-155.

Faber, M., Manstetten, R. and Proops, J.L.R. (1992) Human kind and the environment: An anatomy of surprise and ignorance. Environmental Values 1: 217-241.

Funtowicz, S.O. and Ravetz, J.R. (1990) Uncertainty and Quality in Science for Policy. Dordrecht, The Netherlands: Kluwer Academic Publishers.

Funtowicz, S.O. and Ravetz, J.R. (1992) Risk management as a post-normal science. Risk Analysis 12(1): 95-97.

Funtowicz, S.O. and Ravetz, J.R. (1993) Science for the post-normal age. Futures 25(7): 739-755.

Galbraith, J.K. (1969 [1958]) The Affluent Society. Boston: Houghton Mifflin.

Galbraith, J.K. (1978) On Post Keynesian Economics. Journal of Post Keynesian Economics 1(1): 8-11.

Galbraith, J.K. (1979) The New Industrial State. Middlesex, England: Penguin.

Georgescu-Roegen, N. (1971) The Entropy Law and the Economic Process. Cambridge, Massachusetts: Harvard University Press.

Grigg, D.B. (1992) The transformation of agriculture in the west. Oxford: Blackwell.

Gruebler, A. (1998) Technology and global change. Cambridge: Cambridge University Press.

Hansen, A.H. (1953) A Guide to Keynes. New York: McGraw-Hill.

Hirsch, F. (1977) Social Limits to Growth. London: Routledge and Kegan Paul Ltd.

Hodgson, G.M. (1988) Economics and Institutions: A Manifesto for a Modern Institutional Economics. Cambridge: Polity Press.

Hodgson, G.M. (1997) Economics, environmental policy and the transcendence of utilitarism. Valuing Nature?: Ethics, Economics and the Environment. J. Foster (ed.). London: Routledge.

Holling, C.S. (1986) The resilience of terrestrial ecosystems: local surprise and global change. Sustainable Development of the Biosphere. W.C. Clark and R.E. Munn (eds.). Cambridge: Cambridge University Press: 292-317.

Holt, R.P.F. (2005) Post-Keynesian economics and sustainable development. International Journal of Environment, Workplace and Employment 1(2): 174-186.

Jevons, W.S. (1965 [1865]) The Coal Question: An Inquiry Concerning the Progress of the Nation and the Probable Exhaustion of Our Coal-Mines. New York: Augustus M Kelley.

Kapp, K.W. (1950) The Social Costs of Private Enterprise. New York: Shocken.

Kapp, K.W. (1976) Nature and significance of institutional economics. Kyklos 29(2): 209-232.

Kapp, K.W. (1978) The Social Costs of Business Enterprise, 3rd edition. Nottingham: Spokesman.

Keynes, J.M. (1930) Economic possibilities for our grandchildren. Nation and Athenaeum 48(11 and 18): 36–37, 96–98.

Keynes, J.M. (1971) A Tract on Monetary Reform. The Collected Writings of John Maynard Keynes. London: Macmillan. IV.

Keynes, J.M. (1978 [1936]) The General Theory of Employment, Interest and Money. London: Macmillan.

Keynes, J.M. (1988 [1921]) A Treatise on Probability. London: Macmillan and Co.

Kneese, A.V., Ayres, R.U. and d'Arge, R.C. (1970) Economics and the Environment: A Materials Balance Approach. Washington, District of Columbia: Resources for the Future.

Knight, F. (1921) Risk, Uncertainty and Profit. Boston, Massachusetts: Houghton Mifflin.

Krausmann, F., Schandl, H. and Sieferle, R.P. (2008) Socio-ecological regime transitions in Austria and the United Kingdom. Ecological Economics 65(1): 187-201.

Lawson, T. (1989) Abstraction, tendencies and styalised facts: A realist approach to economic analysis. Cambridge Journal of Economics.

Lawson, T. (1997) Economics and Reality. London: Routledge.

Loasby, B.J. (1976) Choice, Complexity and Ignorance: An Inquiry into Economic Theory and the Practice of Decision-Making. Cambridge: Cambridge University Press.

Lohmann, L. (2006) Made in the USA: A short history of carbon trading. Development Dialogue 48(September): 31-70.

Ludwig, D., Hilborn, R. and Walters, C.J. (1993) Uncertainty, resource exploitation, and conservation: Lessons from history. Science 260(5104): 17 and 36.

Lutz, B. (1984) Der kurze Traum immerwährender Prosperität. Frankfurt: Campus.

Maler, K. (1974) Environmental Economics: A Theoretical Inquiry. Baltimore, Maryland: Johns Hopkins University Press.

Martinez-Alier, J. (2002) The Environmentalism of the Poor: A Study of Ecological Conflicts and Valuation. Cheltenham: Edward Elgar.

Meadows, D.H., Meadows, D.L., Randers, J. and Behrens III, W.W. (1972) The Limits to Growth. New York: Universe Books.

Mearman, A. (2005) Why have post-Keynesians had (relatively) little to say on the economics of the environment? International Journal of Environment, Workplace and Employment 1(2): 131-154.

Mishan, E.J. (1969) Growth: The Price We Pay. London: Staples Press.

Morris, W. (1993 [1890]) News from Nowhere. Penguin Classics. C. Wilmer (ed.). London: Penguin Books: 41-228.

Norgaard, R.B. (1994) Development Betrayed: The End of Progress and a Coevolutionary Revisioning of the Future. London: Routledge.

O'Neill, J.F. (1993) Ecology, Policy and Politics: Human Well-Being and the Natural World. London: Routledge.

O'Neill, J.F. (1997) Value, Pluralism, Incommensurability and Institutions. Environmental Economics: A Critique of Orthodox Policy. J. Foster (ed.). London: Routledge.

O'Neill, J.F. (2001) Representing people, representing nature, representing the world. Environment and Planning C: Government and Policy 9(4): 483-500.

Pfister, C. (2003) Energiepreis und Umweltbelastung. Zum Stand der Diskussion über das "1950er Syndrom". Umweltgeschichte Themen und Perspektiven. W. E. Siemann (ed.). München: C.H. Beck: Cambridge University Press.

Polanyi, K. (1944) The Great Transformation. New York/Toronto: Rinehart and Company Inc.

Polimeni, J.M., Mayumi, K., Giampietro, M. and Alcott, B. (2008) The Jevons Paradox and the Myth of Resource Efficiency Improvements. London: Earthscan.

Pomeranz, K. (2000) The great divergence: China, Europe and the making of the modern world economy. Princeton: Princeton University Press.

Pressman, S. (2006) Fifty Major Economists. London: Routledge.

Ravetz, J. (1995) Economics as an elite folk science: the suppression of uncertainty. Journal of Post Keynesian Economics 17(2): 165-184.

Roncaglia, A. (2003) Energy and market power: an alternative approach to the economics of oil. Journal of Post Keynesian Economics 25(4): 641-659.

Schandl, H., Fischer-Kowalski, M. Grünbühel, C. and Krausmann, F. (2008) Socio-metabolic transitions in developing Asia: Technological Forecasting and Social Change: (forthcoming).

Schandl, H. and Krausmann, F. (2007) The Great Transformation: A Socio-Metabolic Reading of the Industrialization of the United Kingdom. Socioecological Transition and Global Change: Trajectories of Social Metabolism and Land Use. M. Fischer-Kowalski and H. Haberl (eds.). Cheltenham: Edward Elgar: 83-115.

Schandl, H. and Schulz, N. (2002) Changes in the United Kingdom's natural relations in terms of society's metabolism and land use from 1850 to the present day. Ecological Economics 41(2): 203-221.

Sieferle, R.P. (1982) Der unterirdische Wald. Energiekrise und industrielle Revolution. München: C.H. Beck.

Sieferle, R.P. (2001) The subterranean forest: Energy systems and the industrial revolution. Cambridge: White Horse Press.

Sieferle, R.P., Krausmann, F., Schandl, H, and Winiwarter, V. (2006) Das End der Fläche. Zum sozialen Metabolismus der Industrialisierung. Köln: Böhlau.

Smil, V. (2003) Energy at the crossroads. Global perspectives and uncertainties. Cambridge: The MIT Press.

Sneddon, C.,Howarth, R.B. and Norgaard, R.B. (2006) Sustainable development in a post-Brundtland world. Ecological Economics 57(2): 253-268.

Soderbaum, P. (1999) Values, ideology and politics in ecological economics. Ecological Economics 28(2): 161-170.

Spash, C.L. (1995) The political economy of nature. Review of Political Economy 7(3): 279-293.

Spash, C.L. (1999) The development of environmental thinking in economics. Environmental Values 8(4): 413-435.

Spash, C.L. (2002a) Greenhouse Economics: Value and Ethics. London: Routledge.

Spash, C.L. (2002b) Strong Uncertainty: Ignorance and Indeterminacy. Greenhouse Economics: Value and Ethics. London: Routledge: 120-152.

Spash, C.L. and Clayton, A.M.H. (1997) The maintenance of natural capital: Motivations and methods. Space, Place and Environmental Ethics. A. Light and J. M. Smith (eds.). Lanham: Rowman & Littlefield Publishers, Inc. 1: 143-173.

Spash, C.L. and Villena, M. (1999) Exploring the Approach of Institutional Economics to the Environment. 11. Cambridge, Department of Land Economics, University of Cambridge. 31.

Stewart, M. (1979) Keynes and After. Middlesex, England: Penguin.

Swanson, T.M. (1994) The International Regulation of Extinction. London: Macmillan.

United Nations Development Program (UNDP)(2008) Human Development Report 2007/2008: Fighting climate change: Human solidarity in a divided world. Basingstoke: Palgrave Macmillan.

van der Sluijs, J.P., Craye, M. Funtowicz, S.. Kloprogge, P., Ravetz, J. and Risbey, J. (2005) Combining quantitative and qualitative measures of uncertainty in model-based environmental assessment: The NUSAP system. Risk Analysis 25(2): 481-492.

Vatn, A. (2005) Institutions and the Environment. Cheltenham: Edward Elgar.

Wynne, B. (1992) Uncertainty and environmental learning: Reconceiving science and policy in the preventive paradigm. Global Environmental Change (June): 111-127.