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Time to Stop Worshipping Economic Growth

By Brent Blackwelder

Brent Blackwelder

There are physical limits to growth on a finite planet. In 1972, the Club of Rome issued their groundbreaking report—Limits to Growth (twelve million copies in thirty-seven languages). The authors predicted that by about 2030, our planet would feel a serious squeeze on natural resources, and they were right on target.

In 2009, the Stockholm Resilience Center introduced the concept of planetary boundaries to help the public envision the nature of the challenges posed by limits to growth and physical/biological boundaries. They defined nine boundaries critical to human existence that, if crossed, could generate abrupt or irreversible environmental changes.

The global economy must be viewed from a macro-perspective to realize that infringement of the planetary boundaries puts many life support ecosystems in jeopardy. Without functional ecosystems, the very survival of life forms, as well as human institutions, is put in doubt, including any economy. There is no economy on a dead planet!

PB_FIG33_upgraded_mediaBLANK_11jan2015

Scientists are concerned that we have already overstepped the boundaries on biogeochemical flows (nitrogen) and biosphere integrity (genetic biodiversity). [click image for larger view] Image Credit: F. Pharand-Deschênes /Globaïa. 

These boundaries apply to the economy because the economy is a wholly-owned subsidiary of the ecosystems that make life on earth possible. (Some understanding of ecology should be a prerequisite for an advanced degree in economics!) Scientists are concerned that we have already overstepped the boundaries on biogeochemical flows (nitrogen) and biosphere integrity (genetic biodiversity).

Today’s global economy and the various regional and national economies regularly neglect planetary boundaries. Crossing a boundary is tantamount to crashing through a guardrail and plunging over a cliff. The blind encouragement of economic growth that does not respect these boundaries is setting up human civilizations for collapse. Two of the most harmful types of growth are ruthless and futureless.

Ruthless growth benefits a few at the top but does nothing for the middle class. One of the reasons that Bernie Sanders’ presidential campaign has attracted larger and larger audiences is that he says the most crucial issue facing the United States is the gross discrepancy between the middle class and the billionaire class.

Futureless growth destroys resources, such as water, forests, fisheries, and farmland that will be needed by our children and grandchildren, and by wildlife. Futureless growth directly conflicts with common family values. We tell our children to save for the future rather than squander their money. We don’t tell them to outspend their peers. We don’t tell them to judge the quality of their lives based on material possessions and quarterly financial reports.

To remain within the nine planetary boundaries, nations must shed the fetish of economic growth and transition to a true-cost, steady state economy. Some of the critical transition steps include:

  1. Replacing the GDP as a measure of well-being (lots of work has been done on coming up with an index of sustainable productivity).
  2. Getting the Securities and Exchange Commission (SEC) to require corporations to disclose their pollution externalities (the SEC is not hopeless, as can be seen by its recent decision to require CEOs to publish their salaries along with those of the average workers at their companies).
  3. Going to a four-day work week to secure fuller employment (this has happened in some European countries; Canadian economist Peter Victor has papers on why this is a crucial transition step).
  4. Dematerializing the economy (i.e., so that it’s cheaper to repair an appliance than it is to buy a new one).
  5. Identifying the areas in which the economy should grow—and those where it should shrink or degrow (i.e., the usage of fossil fuels must shrink sharply, and in so doing, roof-top solar will grow to become a much larger part of the global economy).
  6. Identifying the most heinous types of economic growth (ruthless and futureless) and showing how their costs exceed their benefits.
  7. Stabilizing population to keep humanity from further transgression of the nine boundaries.

There are about seven billion people on earth today, and forecasts indicate there will be nine billion by 2050. Already, almost one billion malnourished people are feeling the squeeze, as they painfully bear testimony to the truth of what Malthus predicted two centuries ago. Key first steps to stabilizing population in a progressive way are:

  1. Empowerment of women.
  2. Requiring all foreign assistance to be designed so that women will be better off as a result.
  3. Making contraceptives widely available.

Our global economy is treating the planet as if it were a business in a liquidation sale. Even environmental organizations—devoted to environmental protection— have been slow to acknowledge the major causes of environmental degradation, such as perverse economic incentives encouraging raw resource extraction and non-renewable energy use. We need environmental leaders to speak out for a new, just, and true-cost economy; and to challenge the mindless embracing of economic growth—even ruthless and futureless growth. Environmental leaders should be driving the push toward refocusing economic thinking on the changes that we will have to make if we are going to move to a healthier economy that exists within the nine planetary boundaries. Only if humanity stays within these nine boundaries can it continue to develop and thrive for generations to come.

 

 

Appropriate Scarcity

By Robert A. Herendeen

  … appealing to people to restrain themselves [by] self-enforced abstinence alone is a waste of time. By and large, we consume as much as our incomes allow…. changes… cannot take place without constraints that apply to everyone rather than everyone else. Manmade global warming cannot be restrained unless we persuade the government to force us to change the way we live.

—George Monbiot, Heat (2006/2009)

The results indicate that the likelihood of paying a positive amount for supporting renewable energy is higher under a mandatory scheme compared to a voluntary payment option in the UK.

—Elcin Akcura, “Mandatory vs. voluntary payment for green electricity,” Ecological Economics (2015)

 

herendeen.3I believe Monbiot says it true. And Akcura (who knew?) provides research-based confirmation.

I envision fulfilling, challenging, joyful lives within environmental constraints, but I can’t imagine that happening without societal signals to reinforce consistent behavior. If level of consumption is a problem, then scarcity is a necessary part of the solution. In the least disruptive and potentially fairest sense, this means using prices to determine demand. To cut to the conclusion: my favorite example is a carbon tax.

Monbiot’s statement is frightening, Draconian, and an apparent non-starter politically… almost. But the consequence of denying it leads to several futile proposals and viewpoints which permeate the literature, both scholarly and public. They are futile because they do not produce results that are big enough and fast enough to beat back anthropogenic climate change. Hearing them repeatedly frustrates me. These are:

1. We citizens are being sold the idea that economic growth (especially GDP) is good by government bureaucracies that need it to stay alive, and by corporations that want it because they are greedy (e.g., “the 1%”).

2. We are personally acquisitive because of intensive advertising. Otherwise, we would readily embrace “enough is plenty.”

3. A steady state economy will only be achieved when a new human consciousness emerges. That is not exactly imminent, but it’s in sight.

4. Peer pressure will solve the classic (game theoretic?) problems of free riders, defection, and over-riding competitive ambition in general.

The Temple to Ramesses II at Abu Simbel (II)

The Temple to Ramesses II at Abu Simbel (II). Photo Credit: Institute for the Study of the Ancient World.

The human beings that I observe, work and live with, and love, largely don’t fit these principles. This includes me. We need help. So, about these points:

1. Most of us don’t know or care what GDP is. However, we do have explicit or implicit desires for material/experiential growth at the personal or familial level. Such as: a larger house, a vacation cottage, a new car, a foreign eco-tour, increased travel to visit the grandkids, a secure college fund or retirement package, some new clothes—probably before the old ones wear out. Sum these aspirations over the population and you have pressure for overall growth.

Recently I asked who in my circle at the edge of academia in a progressive college town wants zero personal or professional economic growth. Not soon-to-graduate students looking for the first job. Not immigrants who arrive with almost nothing. Not newlyweds considering starting a family. Not academics building research programs or pursuing tenure. Not college presidents. Not development officers of green non-profit organizations. Not the mayor or city council. And of course not the usual suspects in the business community. I finally concluded that some well-off retirees seem to want zero growth….that’s about it.

2. Watch a TV auto ad and it’s difficult not to suspect—and resent—advertising’s role in fanning the flames of demand. (Mmmmm, a lone car on an otherwise unoccupied road accelerating against the shriek of the engine and the announcer’s deep n’ throaty voice…). But what advertising seduced Pharaoh Ramesses II into carving four 65-foot-tall likenesses of himself from native rock at Abu Simbel ca. 1250 BC? Or the government of Dubai into erecting the 2,722 foot (i.e, 0.52 mile) Burj Khalifa Tower in 2009 AD? I believe essentially all of us are hard-wired to want more of something for some reason. If there is good evidence that advertising is the culprit in overall consumption growth and not just in choosing between spending options, let’s see it.

3. Given the three-millennia separation of the two above construction projects, I think it is wishful thinking to expect Homo sapiens to spontaneously embrace zero growth collectively any time soon.

4. But even if 99+% of us do that, what about the non-cooperators? To the extent that the world is zero-sum (a politically incorrect but applicable description if there really are limits), it takes only a few competitively acquisitive individuals to produce a mess. If the few want more, sooner or later they will destabilize a group of otherwise modest, cooperative individuals. Envy kicks in, or defensive measures to avoid losing. An example of the latter: What to do when the tax bill on your modest abode skyrockets when Ringo Starr and Mick Jagger move in next door (aka the “Aspen effect”)? Try to maintain your modest lifestyle and move 40 miles downriver, or do what it takes to get into the high production/consumption game yourself?

All this brings me back to Monbiot’s bald and bold statement: there is negligible action without effective, broadly felt, implementable…scarcity. In other words, “appropriate scarcity” is not optional; it is necessary. Yes, increasing the price of “bads” is a frequent theme on these pages, but often only as one item in a longish list of principles based on Herman Daly’s powerful writings. Rather, it should be at the top of the list.

There is no question that accomplishing scarcity (for fossil energy, say) by caps and/or taxes is politically, socially, economically, and humanly difficult—a global top-ten red flag. I believe that at the U. S. national level at least, it is feasible. Equity impacts can be minimized by income tax rebates to lower-income households. Other impacts, especially regional, are tougher. In general, moving slowly reduces disruption, but we have scant time. What I hope for is national-level appropriate scarcity of fossil fuels. Done right (a daunting task, to be sure), we can reinforce our own behavior in doing what we (say we) must do to restrain global warming, and have good lives doing it.

 

Dr. Robert Herendeen is a fellow at the Gund Institute for Ecological Economics at the University of Vermont. His research interests include energy consumption, quantitative analysis of environmental issues, and environmental bookkeeping. He is a physicist who conducts economic input-output analyses to determine resource requirements and other impacts of consumption, following the parallels between economic and ecological systems and analysis of perturbed ecosystems. His most recent work covers the connection between net energy and the price of all consumer products.

rherende@uvm.edu

 

The Future History of Political Economy – Part 2

Thermodynamics in Economics: Revolutionary portent, future history

by Eric Zencey

Eric ZenceyEcological Economics represents the extension into economics of the thermodynamic revolution of the nineteenth and twentieth centuries. In physics, that revolution dethroned Newton and brought relativity. In biology, it was midwife to the birth of ecology, the study of ecosystems as wholes in which energy networks—food webs—are a defining structure. In chemistry the laws of thermodynamics brought clarity and rigor to a science that struggled to bring theoretical unity to diverse phenomena. So far, though, most economists are perfectly willing to treat their subject matter as if the laws of thermodynamics simply don’t apply to it.

2 models 5

But the thermodynamic revolution in economics can’t be permanently forestalled. For one thing, it’s getting harder and harder for the neoclassical model to reassure us that its system of Newtonian abstractions is a good fit to the real world. The Great Collapse of 2008 demonstrated that whatever else it is, the discipline of economics isn’t very good at predicting major economic phenomena. Climate change and the Sixth Extinction make it hard for economics to maintain its pretense that economic activity takes place in abstractia, on the clean white pages of textbooks or on whiteboards holding formulae, with no roots in or consequences for anything outside of itself. Truths derived on the model of Newtonian mechanism are supposed to be abstract and ahistorical, but our planet and our economy are most assuredly evolving concretely and over time.

The driving dynamic of this economic and planetary change—the driver of history for the past three centuries—has been human use of high-EROI fossil fuel. The driving dynamic of the history yet to come will be the declining EROI of our civilization’s energy sources.

Oil Well 3.Texas State Archives

Oil used to gush out of the ground under pressure, making for a very high Energy Return on Energy Invested (EROI). In the 1920s, wells like this gave the industry an average EROI of 100 to 1 or more. Today’s petroleum industry has a much lower EROI. Photo Credit: Texas State Archives

You can see some of the consequences of declining EROI already:

  • Despite a rising real per capita GDP, for a significant percentage of workers in OECD nations personal income has flatlined or is declining. An increasing concentration of income helps explain this but another dynamic is at work as well. As EROI falls, it takes more economic effort to get the energy that’s needed to support economic effort. Even as gross economic activity (GDP) grows, production of net benefit is shrinking.
  • Other sectors of the economy have been affected by this ongoing increase in the economy’s matter-and-energy overhead. “Austerity” has become the watchword for governmental budgets, even in the wealthiest nations in the world. Developed countries find it increasingly difficult if not impossible to pay maintenance and upgrade costs on infrastructure investments made in the heyday of 100-to-1 oil.
  • In its 2013 report card on America’s infrastructure, The American Society of Civil Engineers estimated that the U.S. needs to invest $3.6 trillion over seven years to restore and maintain existing infrastructure.
  • Worldwide, many of the ecosystems that support human civilization are degraded and close to collapse. Forced by both ideology and declining EROI into austerity budgeting, governments are reducing their scope and energy at the exact moment that sustainability would have them take strong action to rein in the rational, free-market tendency of corporations to maximize profits by degrading the commons and externalizing other costs.
  • Pension-fund wipeouts are becoming common as one way to fulfill the economy’s structural need for debt repudiation—a need that lies in our system’s willingness to let debt grow faster than a declining EROI economy can pay back, even after growth has been stimulated by lifting or reducing regulations that limit the environmental damage done by economic activity.
  • The planetary carbon sink is full, producing climatic effects that even an abstraction-inhabiting, arithmo-morphizing economist has to acknowledge as a troubling reality.

Centuries from now economic historians are likely to understand the relationship between EROI and wealth creation much better than does the average economist of today. I think it likely that future political economists will express wonder not at the 20th century’s enormous economic success, but at how little we actually added to our stock of wealth for all the high-EROI coal and oil it was our pleasure to burn. They are almost certain to shake their heads in wonder that we, enjoying an energy supply and an EROI never seen on the planet before or since, could ever have experienced an economic downturn, could ever have let a human starve from want, could ever have been so programmatically blind to the physical origins of our fortunes.

The Future History of Political Economy – Part 1

Economics Ignores Thermodynamics

by Eric Zencey

Editor’s Note: An earlier version of this essay appeared as a comment in the Great Transition Network Forum, which will appear on the Great Transition Initiative website next week along with a new essay by Herman Daly, “Economics for a Full World.”

Eric ZenceyEcological Economics and its corollary, Steady State Economic thinking, represent a step forward for the discipline of economics and also a return to how it was practiced in the past. In the nineteenth century, economics was a part of a larger enterprise: political economy, the integrated treatment of morals and economics, ultimate ends and efficient means. Late in that century economics calved off from political economy, leaving behind political science and political philosophy as the residuum. It did this in service to the ideal of becoming rigorously scientific.

It’s odd, then, that alone among disciplines with any pretense to analytic rigor, economics has steadfastly resisted the thermodynamic revolution that swept physical and life sciences in the nineteenth and early twentieth centuries. Physics, biology, chemistry, geology, even the study of history were transformed, but not economics.

I think we can blame this on bad timing, willful ignorance, and oil.

Bad timing

In the late nineteenth century the archetypal science was physics and physics was Newtonian mechanism. Ignorant of what a young thermodynamic theorist named Albert Einstein would soon do to the Newtonian paradigm they emulated, Stanley Jevons and other economic “scientists” set about mathematically modeling the economy as sets and subsets of self-contained, equal-and-opposite actions and reactions, happily (and explicitly) assuming that all economic activity consists of ahistorical, which is to say completely reversible, processes. No one who has a nodding acquaintance with the law of entropy could have countenanced this. Entropy is Time’s Arrow, the law of irreversibility; it describes the one-way flow of energy use. A purely mechanical process can be run forward or backwards, but we’ll never invent a machine that can suck in exhaust gases, heat and motion and transform them into gasoline. The entropy law can tell you why. Newton couldn’t.

Just as a consumer might choose to keep a recently purchased appliance even though a newer, better model has been brought onto the market, neoclassical economists weren’t about to re-tool their brand-new thinking to reflect changes in the underlying metaphysics they had been so keen to adopt. It didn’t seem to them that there was any reason to.

“Seem” is the operative word here. Because the entropy process is time’s arrow, and because Ecological Economics places the entropy process at the center of its analysis, it’s entirely appropriate for Ecological Economics to understand its subject matter and itself as a discipline in historical terms. Like other paradigm-defining insights, this one seems obvious once it has been stated: elements of the neoclassical model that could pass for true on a large and forgiving planet a hundred years ago are obviously not true today, when the planet’s source-and-sink services are severely taxed, when natural capital is the limiting factor in production, when there are seven billion of us and our economic wants, capacities and expectations have been amplified by our access to the ancient sunshine of fossil fuels.

Willful ignorance

By modeling the economy as a closed and circular system, neoclassical economists have encouraged themselves to operate in a methodologically enforced state of denial about the physical roots and ecological consequences of our wealth-creating activities. And yet economics has experienced no paradigm-shaking crisis as a result. Neither climate change nor any of the other source-and-sink catastrophes facing civilization have been laid at the feet of bad economic theory. One reason: Neoclassical economists succeed in treating environmental costs as “externalities.” How could environmental degradation be the result of economic activity if it’s external to the economy?

Midas.Giovanni Caselli from the Age of Fable

The power to create wealth gave Midas an unsustainable life as a complete solipsist. Oil’s power to create wealth has had a similar effect on Neoclassical economics. Illustration by Giovanni Caselli from The Age of Fable.

In its self-confirming isolation of the economy from nature and theory from reality, neoclassical economics amounts to a highly principled practice of solipsism. When this pathology is manifest in an individual it produces unpleasant consequences that might eventually prompt some reflection and personal growth. Not so with the collective delusion of mainstream economists. Evidence of our ongoing ecological catastrophe falls far from their purview—not just disciplinarily but geographically, as the wealthier nations (wherein the vast majority of economists reside) export their ecological footprint to the impoverished nations of the world. And for several generations (at least since Reagan defeated Carter, removed Carter’s solar panels from the White House and ushered in an era of GDP growth through de-regulation of the social and ecological consequences of economic activity), there has been a strong self-selection among students of economics. Undergraduates with any kind of deep personal connection to natural systems tend to find the study of standard economics unattractive, displeasing, even soul-deadening. This leaves the field to those most willing to bracket off as irrelevant to their professional purpose any question about the moral and ethical consequences of economic activity, any question about the health and maintenance of nature, any question about the economy’s relation to the larger social and natural systems within which it operates.

Oil

Even so, you might expect that a discipline with such a demonstrably deficient view of its subject matter would fail of its object—would fail to offer wise counsel about the collective project of augmenting the stock of wealth that humans can enjoy. But economics has had much apparent success. Despite regular downturns and financial crises, the wealth produced by our economies has grown and grown and grown. I think there’s a ready explanation that becomes visible through the conceptual lens of Ecological Economics, which tells us that energy isn’t a commodity like any other but a fundamental factor of production (part of a trio: matter, energy and human design intelligence). When your economy operates on an energy source that cranks out wealth-making value in a ratio of 100 to 1 or better—the estimated Energy Return on Energy Invested that petroleum offered us in the early 20th Century—you can believe any damn thing you want about how economies operate and your economy will still generate a great deal of wealth.

Which is to say, high-EROI oil granted the new science of economics immunity from being proven false by events. But falsifiability of principles and propositions is one solid measure of a science. (Non-falsifiable beliefs are called faiths.)

In effect the discipline of economics has a free rider problem—it’s been given a free pass by the enormous power of oil to misunderstand itself and its subject matter. You could also call it a Midas Problem, after the legendary king whose touch turned everything he touched into gold, including his dinner and his daughter. The power of wealth-generation that oil granted to our economy made it impossible for the discipline of economics to connect in any fundamental way with otherness, including the otherness of the planet and its role in the very processes that economics presumes to model.

 

Cold War Left Overs

by Herman Daly

Herman DalyThose of us old enough to remember the Cold War will also remember that it involved a growth race between Capitalism and Communism. Whichever system could grow faster would presumably win the allegiance of the uncommitted world. The idea of a steady state was therefore anathema to both sides. The communist growth god failed first because of political repression and economic inefficiency. But the capitalist growth god is now failing as growth becomes uneconomic due to environmental and social costs, and is propped up only by fraudulent accounting, monopoly, and financial corruption. Neither system can accept the idea of a steady-state economy, but neither can attain the impossible alternative of growing forever.

Advocates of the steady-state economy are long accustomed to attacks from capitalists, which have by no means disappeared. We are less accustomed to attacks from the left, not from communists who have virtually disappeared, but from remaining Marxists and socialists. Although Marxism is largely discredited (along with other manifestations of 19th century determinism, such as Freudianism and Eugenic Darwinism), one cannot by any means take that as a vindication of capitalism, which has only gotten worse in its quest for unending growth. In spite of my overall negative view of Marxism, there are some “green Marxists” who, in my opinion, are worth reading (e.g. John Bellamy Foster, Brett Clark, Richard York, The Ecological Rift). Recently, another socialist (I am not sure if he considers himself a Marxist) has criticized the steady-state economy for being essentially capitalist. This is economic historian Richard Smith. He sees the steady-state economy as a distraction from “eco-socialism.”

One should be grateful to one’s critics–it is much better to be criticized than ignored. Richard Smith kindly takes me as his exhibit A for a position that he misleadingly labels “steady-state capitalism.” I have never used that term, always speaking of a steady-state economy, which is neither capitalism nor socialism, although it draws features from both. Indeed, in the Cold War context it was thought to offer a Third Way, a possibility for uniting the best features of each system. Change is impossible unless you start from where you are. As noted, I am more accustomed to attacks from capitalists, so it is at least a refreshing change to be attacked, and on balance rather politely, by a socialist who, unlike many neoclassical growthists, has taken the trouble to learn about the steady-state economy. Disagreements will follow, but my appreciation for his critical attention needs to be expressed.

Richard Smith characterizes capitalism as a system that must “grow or die.” It then follows immediately that since capitalism must grow, it cannot be a steady state. OK then, if capitalism cannot be a steady state, then neither can a steady state be capitalism. So let’s not speak of “steady-state capitalism.” I, for one, never have–although Mr. Smith tendentiously attributes that term to me. By the same logic, following Marx, one might define socialism as a classless society based on overwhelming material abundance arrived at through rapid economic growth under the centrally planned dictatorship of the proletariat. Socialism also depends on growth. Therefore steady-state socialism is impossible. It was precisely to avoid such sterile definitional disputes that I always said “steady-state economy,” and never “steady-state capitalism,” or socialism for that matter.

Empty world models will no longer work in our full world. Photo Credit: www.TheEnvironmentalBlog.org

Would it not be more productive to start by defining a steady-state economy, followed by arguments for its necessity and desirability? We could then avoid ideological classifications based on abstract definitions of what capitalism or socialism “essentially must always be.” We now live in a full world. Capitalism and socialism are both from the empty-world era in which growth was the desideratum. Must we insist on pouring new wine into old wineskins, and then watching them burst?

Smith’s unhappiness with me derives most specifically from my preference for the market over centralized planning as a tool for dealing with the single technical problem of allocative efficiency. Steady-state economics deals with three problems: sustainable scale, just distribution, and efficient allocation. It takes the first two issues, scale and distribution, away from the market. It calls for quantitative ecological limits on the throughput of resources so that the market can no longer determine the physical scale of the economy relative to the biosphere. It also advocates social limits to the range of income inequality, so that the market can no longer generate large inequalities of wealth. Subject to these two prior macro-level aggregate constraints, it then relies on the market to efficiently allocate resources. This is not advocacy of the Market with a capital M, the deified master evaluator and controller of life. This is market with a small m, a limited tool for rationing, communicating, and exchanging goods and services.

Reliance on markets for allocation (now within prior ecological and distributional limits) is further constrained, even within traditional microeconomics, by opposition to monopoly, and restriction of market allocation to rival and excludable goods. Non-rival and public goods have long been recognized to require some degree of non-market allocation. Even so, Mr. Smith is still unhappy with any role for markets.

Richard Smith deserves credit for recognizing and opposing the real evils of financial-monopoly-crony capitalism as it currently exists. And, unlike both traditional Marxists and neoclassical economists, he realizes that we cannot grow forever, and that we have in many dimensions already far overshot optimal scale. And he takes the trouble to debate critical issues rather than ignore them. However, he thinks only socialism can somehow cure these evils. The operative word here is “somehow.” Somehow we must wipe the slate clean of any institutions associated with markets, such as property, division of labor, exchange, and profit. How? By violent revolution? By rational persuasion? By moral conversion? That is left vague. It is all very well, for example, to point out the real problems with excess reliance on the profit motive. But if we abolish profit as a source of income then we also abolish self-employment. Everyone must then become an employee earning a wage. Who then is the employer? Do we all then work for Ajax United Amalgamated Corporations? Or for the Universal State Monopoly? Is there something about the mere act of exchange, and the category of profit, (not just excessive inequality and monopoly ownership of the means of production) that offends or confuses Marxists?

Nevertheless, if Marxists now advocate limiting growth, that is a big change. Maximizing growth to achieve overwhelming material abundance has been seen as the path to the “new socialist man,” who, according to Marx, can only be freed from his bourgeois greed by objective abundance, by the abolition of scarcity, not by the “utopian” morality of sharing. I have never seen a Marxist proposal to limit the scale of the macro economy to an ecologically sustainable level–nor for a maximum as well as a minimum income to limit the range of distributive inequality to a reasonable and fair degree. Rhetorical calls for absolute equality and abolition of private property abound, but are neither realistic nor fair.

Marxists also go far out of their way not to recognize overpopulation and the need to limit population growth (a critical dimension of both scale and distributive inequality, given class differentials in fertility and access to contraception). A stationary population is part of the definition of a steady-state economy. Furthermore, a limited range of income inequality would restrict the ability of the rich to bid necessities away from the poor in the market. Unjust distribution of income does get reflected in markets, but let us attack the cause, not the symptom. And quotas on basic resource throughput could raise prices enough to eliminate most frivolous and wasteful production, as well as stimulate recycling, and increase efficiency while ruling out the Jevons effect. If we start with depletion quotas on basic resources, then the resulting increase in resource prices and efficiency cannot lead to more use of the resource. Auctioning transferrable quotas rather than giving them away (markets rather direct government allocation, pace Mr. Smith) will raise enough revenue to greatly reduce taxes on the poor.

It is not at all clear why Smith thinks markets must always be bad masters rather than good servants. If we forgo markets, should we then perhaps have another go at central planning and collectivization of agriculture? Would Mr. Smith have preferred War Communism to Lenin’s New Economic Policy because the latter was really just “state capitalism” that re-established significant reliance on markets? To be fair, we do not know what Smith thinks about any historical experience with the abolition of markets because he does not mention any.

If “eco-socialists” reject the steady-state economy as “inherently capitalistic,” then what specific policies do they recommend? How do their policies differ from those of steady-state economics? Are there some policies we agree on?

Critics of the present growth economy, whether steady-state economy or “eco-socialist,” are, however, united in humility before a common dilemma–namely that the bought-and-paid-for government that would have to enact the programs needed for a steady-state economy is the same government that would have to run a socialist economy. A government that cannot even break up too big to fail monopolies, or provide debt-free money as a public utility, or tax carbon, will certainly not be able to administer a centrally planned economy–nor even a steady state. We have deeper problems of moral and spiritual renewal (in addition to recognition of finitude and laws of thermodynamics) that transcend both capitalism and socialism. It is admittedly hard to envision the source for the basic moral renewal required to face the enormous problems that are looming, but Marxist dialectical materialism and collectivism seem to me already to have historically demonstrated their failure in this regard. We need something new. Although things look bleak, we never know enough to justify giving up hope. But we should avoid repeating past mistakes.

News on Blue Planet Prize

Editor’s Note: the below is cross-posted from The Asahi Glass Foundation website. We are very excited Daniel Janzen, INBio, and (especially) Herman Daly’s achievements are being celebrated with this prestigious award. Congratulations! 

Announcing the winners for 2014 Blue Planet Prize

Today, we issued a press release announcing the winners of the 23rd Blue Planet Prize.

The winners are

Prof. Herman Daly (USA) Professor Emeritus, School of Public Policy, University of Maryland

Prof. Daniel H. Janzen (USA) Professor, Department of biology, University of Pennsylvania
Instituto Nacional de Biodiversidad (INBio) (Founded in Costa Rica)

The commemorative lectures by the winners will be held at the United Nations University (Shibuya Ward, Tokyo) on November 13 (Thursday). Details will be posted on our website at a later date.

2014 (23rd) Blue Planet Prize Winners

Herman DalyProf. Herman Daly (USA)
Professor Emeritus, School of Public Policy, University of Maryland

Prof. Daly redefined “steady state economics” through the concept of sustainability by incorporating such factors as the environment, local communities, quality of life, and ethics into economic theory, which lead to building a foundation of environmental economics. He has been questioning whether economic growth brings happiness to humans and has been issuing warnings to society, which tends to overemphasize economic growth. As a consequence, he has had a significant international influence.

23-Janzen_INBioProf. Daniel H. Janzen (USA)
Professor, Department of biology, University of Pennsylvania

Instituto Nacional de Biodiversidad (INBio) (Costa Rica)

Prof. Janzen and the Instituto Nacional de Biodiversidad of Costa Rica (INBio) propose measures and policies on sustainable development in harmony with local environmental conservation and local inhabitants and works on environmental education and the conservation of biodiversity. INBio’s activities serve as a valuable role model, from which people both in developed and developing countries around the world should learn.

Remarks from the Award Recipients upon Notification of their Selection

Prof. Daly
I am both honored and humbled to accept the magnanimous Blue Planet Prize from the Asahi Glass Foundation. The making of such important products as glass and chemicals is already a great benefit to the world. Encouraging and supporting others in their efforts to protect and improve our Earth home, as the Asahi Glass Foundation does, is truly an example of generosity and service. When one is treated generously, then one is inspired to treat others the same way. Thank you for that inspiration, and for including me among a list of recipients whom I have long admired.

This recognition is not only an encouragement to me, but also to many friends and colleagues who have worked hard to protect and preserve our Earth from the destruction caused by excessive growth and careless waste. Among these I especially include my colleagues in the International Society for Ecological Economics. If I have done anything to deserve this Prize it is to have provided a generational connecting link between my best teachers and my best students. May this award strengthen that continuing chain into the future!

Prof. Janzen
We – all of us, including 2.6% of the world’s biodiversity – are delighted and honored to learn of the Blue Planet Prize for us and Costa Rica’s INBio. This honor really is for a cast of thousands of Homo sapiens – Costa Ricans and internationals – dancing with billions of other beasts, each doing their part to keep alive some portion of the nature that produced all of us. It is wonderful and wise that years ago the Asahi Glass Foundation had the foresight to offer this support to attempts to move away from the very human tendency to consume and alter our nest. Yes, we can restore some of what we have destroyed, and yes, we can help the world to become biologically literate. Without bioliteracy, nature is just a green threatening mass and there is little hope of its peaceful coexistence with all of us. We, INBio, and Area de Conservacion Guanacaste, are happy recipients of this recognition of decades of trying to open the doors of conserved wildlands to non-damaging partnerships with humanity. Only through direct understanding of the wild world can society welcome it into the family, village and nation.

INBio
To receive the prestigious Blue Planet Prize, given in recognition of our voluntary efforts to conserve Costa Rica’s rich biodiversity is a great honor, which we appreciate in all of its significance. We are humbled to be among many of the most outstanding authorities and leaders in the quest for solutions to the global environmental problems who have been previously recognized with this award, as well as to share it with Dr. D.H. Janzen, a world authority in tropical ecology and conservation with whom INBio has worked in a mutually beneficial association.

What our National Biodiversity Institute has been able to achieve through its institutional efforts has been largely determined by an enabling national environment; the endorsement of the Government of Costa Rica; the support of bilateral and multilateral development agencies; the collaboration of the scientific community and the profound commitment of INBio’s community with the cause of promoting a greater awareness of the value of biodiversity in our society.

The Blue Planet Prize becomes a new source of inspiration and motivation to continue our search for a harmonious relationship between humanity and our living world.

Integrating Ecology and Economics

by Herman Daly

Herman DalyAttempts to integrate economics and ecology have been based on one of three strategies: (1) economic imperialism; (2) ecological reductionism; (3) steady-state subsystem. Each strategy begins with the picture of the economy as a subsystem of the finite ecosystem. Thus all three recognize limits to growth. The differences concern the way they each treat the boundary between the economy and the rest of the ecosystem, and that has large policy consequences for how we accommodate to limits.

Ecology & Economy

 

Economic Imperialism

Economic imperialism seeks to expand the boundary of the economic subsystem until it encompasses the entire ecosphere. The goal is one system, the macro-economy as the whole. This is to be accomplished by complete internalization of all external costs and benefits into prices. Those myriad aspects of the biosphere not customarily traded in markets are treated as if they were by imputation of “shadow prices”–the economist’s best estimate of what the price of the function or thing would be if it were traded in a competitive market. Everything in the ecosphere is theoretically rendered comparable in terms of its priced ability to help or hinder individuals in satisfying their wants. Implicitly, the end pursued is ever-greater levels of consumption, and the way to effectively achieve this end is growth in marketed goods and services.

Economic imperialism is basically the neoclassical approach. Subjective individual preferences, however whimsical, uninstructed, or ill-considered, are taken as the ultimate source of value. Since subjective wants are thought to be infinite in the aggregate, as well as sovereign, there is a tendency for the scale of activities devoted to satisfying them to expand. The expansion is considered legitimate as long as “all costs are internalized.”

But many of the costs of growth we have experienced have come as surprises. We cannot internalize them if we cannot first imagine and foresee them. Furthermore, even after some external costs have become visible to all (e.g., climate change), internalization has been very slow and partial. Profit maximizing firms have an incentive to externalize costs. As long as the evolutionary fitness of the environment to support life is not perceived by economists as a value, it is likely to be destroyed in the imperialistic quest to make every molecule in creation pay its way according to the pecuniary rules of present value maximization.

Ironically, this imperialism sacrifices the main virtue of free market economists, namely their antipathy to the arrogance of central planners. Putting a price tag on everything in the ecosphere requires information and calculating abilities vastly beyond any imagined capacity.

There is no doubt that once the scale of the economy has grown to the point that formerly free environmental goods and services become scarce, it is better that they should have a positive price reflecting their scarcity than to continue to be priced at zero. But there remains the prior question: Are we better off at the new larger scale with formerly free goods correctly priced, or at the old smaller scale with free goods also correctly priced (at zero)? In both cases, the prices are right. This is the suppressed question of optimal scale, not answered, indeed not even asked, by neoclassical economics.

Ecological Reductionism

Ecological reductionism begins with the true insight that humans and markets are not exempt from the laws of nature. It then proceeds to the false inference that human action is totally explainable by, reducible to, the laws of nature. It seeks to explain whatever happens within the economic subsystem by exactly the same natural laws that it applies to the rest of the ecosystem. It subsumes the economic subsystem indifferently into the natural system, erasing its boundary. Taken to the extreme, in this view all is explained by a materialist deterministic system that has no room for purpose or will. This is a sensible vision from which to study the ecology of a coral reef. But if one adopts it for studying the human economy, one is stuck from the beginning with the important policy implication that policy makes no difference.

The reductionist vision frequently appeals to the Maximum Entropy Production Principle (often capitalized to elevate it to the same level as the Second Law of Thermodynamics). It says that whatever competing system maximizes entropy production will be competitively selected. Indeed one can appreciate the logic of this principle. The system that can monopolize and most rapidly degrade available sources of low entropy will displace competing systems by depriving them of their energy source. This insight should be taken seriously as a natural tendency. But when we apply it to the human economy it gives us an absurd policy implication. Namely, that the economy maximizes entropy production. Since maximizing entropy is the same as maximizing waste, that hardly offers a sensible rule for either understanding or directing the human economy!

The maximum entropy principle is more like the tragedy of open access commons than like the Second Law of Thermodynamics. That is, it is a trap–a competitive race to the bottom in the absence of collective action. The Second Law by contrast is an inevitability that we must recognize and adapt to; it has no known exceptions. The maximum entropy production principle is not a physical law. No action, collective or individual, can avoid the Second Law. Like the tragedy of the commons, the tragedy of entropy maximization is a detrimental competitive tendency that we must overcome by collective action. But if we mistakenly consider it a physical law on the level of the Second Law of Thermodynamics, then there is nothing to do but give up.

Economic imperialism and ecological reductionism have in common that they are monistic visions, albeit rather opposite monisms. It is the monistic quest for a single substance or principle by which to explain everything that leads to excessive reductionism on both sides. Certainly one should strive for the most reduced or parsimonious explanation possible without ignoring the facts. But respect for the basic empirical facts of natural laws on the one hand, and self-conscious purpose and will on the other hand, should lead us to a kind of practical dualism. After all, that our world should consist of two fundamental elements offers no greater inherent improbability than that it should rest on one only. How these two fundamental elements of our world (material cause and final cause) interact is a venerable mystery–precisely the mystery that the monists of both kinds are seeking to avoid. But economists are too much in the middle of things to adopt either extreme. Economists are better off denying the tidy-mindedness of either monism than denying the facts that point to an untidy dualism.

The Steady-State Subsystem

We must pay attention to the optimal scale of the human economy to protect the ecosystem we depend on. Photo Credit: Elisa Bracco

We must pay attention to the optimal scale of the human economy to protect the natural ecosystem we depend on. Photo Credit: Elisa Bracco

The remaining strategy is the steady-state subsystem. It does not attempt to eliminate the subsystem boundary, either by expanding it to coincide with the whole system or by reducing it to nothing. Rather, it affirms both the interdependence and the qualitative difference between the human economy and the natural ecosystem. The boundary must be recognized and drawn in the right place. The scale of the human subsystem defined by the boundary has an optimum, and the throughput by which the ecosphere physically maintains and replenishes the economic subsystem must be ecologically sustainable. That throughput is indeed entropic, but rather than maximizing entropy the goal of the economy is to minimize low entropy use needed for a sufficient standard of living–by sifting low entropy slowly and carefully through efficient technologies aimed at important purposes. The economy should not be viewed as an idiot machine dedicated to maximizing waste. Its final cause is not the maximization of waste but the maintenance and enjoyment of life.

The idea of a steady-state economy comes from classical economics, and was most developed by John Stuart Mill (1857), who referred to it as the “stationary state.” The main idea was that population and the capital stock were not growing, even though the art of living continued to improve. The constancy of these two physical stocks defined the scale of the economic subsystem. Birth rates would be equal to death rates and production rates equal to depreciation rates. Today we add that both rates should be equal at low levels rather than high levels because we value longevity of people and durability of artifacts, and wish to minimize throughput, subject to maintenance of sufficient stocks for a good life.

Ecological economics should seek to develop the steady-state vision, and get beyond the dead ends of both economic imperialism and ecological reductionism.

Getting to the Root of the Problem

by Rob Dietz

Dietz_Author_PhotoFarmland LP is a business born from the “uh-oh moment.” The uh-oh moment arrives when you comprehend just how unsustainable modern society has become. Although it can occur as an epiphany, it more commonly comes at the end of a long journey of grappling with grave topics like climate change, poverty, species extinctions, and resource wars. Jason Bradford’s journey wound through college classrooms, South American forests, and California farm fields. With remarkable determination, he turned his uh-oh moment into acres and acres of inspiration.

Bradford is a stocky ball of energy with a quick smile, hearty laugh, and rapid-fire delivery. All three are on display as he discusses his early career. As a graduate student in botany and biology, he assessed tropical ecosystems. He says, “I studied ecosystems in the cloud forests of Costa Rica because they were so cool — I wanted to understand how they fit in the global ecosystem.” He became the go-to guy for the Cunoniaceae family of plants, and his studies propelled him around the world, including a stop in Peru’s Manu National Park to study the effects of climate change on forest diversity.

“Manu is where I got my big uh-oh. I went from being a taxonomist to a team leader, so I had to understand the big picture.” His big-picture role included digesting reports of the Intergovernmental Panel on Climate Change (IPCC). The IPCC conducts assessments that, according to Bradford, take input from one specialty and use it to develop output for another specialty. That output, in turn, becomes a new round of input, and so on. “Climate change predictions start with economic models that estimate future population, resource use, and emissions. With emissions predictions, the climatologists predict temperature changes, and the biologists and agronomists come up with prescriptions.” Bradford detected what he saw as a fatal flaw in this modeling — there was no feedback. The economic models were based on continuously growing consumption, but the storms and emergencies coming from the climate models would, in time, keep the economy from growing. Somehow the modelers had overlooked this critical detail.

“Here I was, a recent Ph.D. at U.C. Davis, and I kept asking, ‘What’s wrong with me? Do I not understand economics?'” Bradford kept digging and unearthing troubling truths. He read the research on limits to growth, studied ecological economics, and concluded that the economic assumptions we live by are pushing us into a terrible trap. His university colleagues avoided the issue. “They would say things like, ‘You’re right, but we can’t do anything about it. Just keep your head down; the implications are too big.'” No one would question the ideology of continuous economic growth. Bradford says, “I understood why it was difficult for people, but I couldn’t erase what I had learned.” His next move demonstrates the determination needed to get out of the trap.

“I could have had a nice career as a professor studying amazing ecosystems, but the cloud forests wouldn’t survive — my research wouldn’t help them. I had to tackle [the problem of] resource overconsumption.” He departed academia and relocated to Willits, California to work on economic relocalization. He started a network of people pursuing a thriving but thrifty local economy. He produced and hosted The Reality Report, a radio program about sustainability. He founded Willits Economic Localization, a nonprofit that served as a template for the Transition Towns movement. That’s a bold and effective response to the uh-oh moment, but it wasn’t enough for Bradford. Not content just talking about the issues, he wanted to create a successful demonstration of economic localization.

Jason Bradford leading the way (photo by Eric Näslund)

Jason Bradford leading the way (photo by Eric Näslund)

No sector of the economy is more fundamental than food, and Bradford’s background in plants made him a natural for exploring the local food economy. He started an organic vegetable farm and partnered with a nearby school to bring his produce into the cafeteria. Despite his farm’s success, his overactive mind wouldn’t rest. “I had worked so hard on one acre, but what I had accomplished wouldn’t show up on a bar chart. Our produce wasn’t selling in Safeway where most of my neighbors went grocery shopping.” Bradford realized that to make a difference in the food economy, local organic farms needed more support, and that meant access to big money. The stage was set for another move.

Bradford knew he needed to be in a premium agricultural region. Hence the move to Oregon’s Willamette Valley. Based on land prices, proximity to markets, water availability, and the sustainability-literate population, he recognized the city of Corvallis as the perfect place to launch Farmland LP and bolster the local food economy.

For an organization with a world-changing agenda, Farmland LP has a refreshingly simple model that can be explained in five basic statements: (1) Attract money from investors. (2) Buy conventional farmland. (3) Convert the farmland to organic. (4) Sell high-value crops, meats, and seeds in the local economy. (4) Provide a reasonable rate of return to investors. (5) Scale up operations so that healthy lands and healthy foods become the cornerstone of the economy.

In contrast to the model, getting Farmland LP up and running has been anything but simple. Bradford and his business partner Craig Wichner took on considerable personal risk, working without a paycheck or a safety net for years. But their efforts are paying dividends. They have attracted funding not only to buy land, but also to purchase livestock and equipment and hire farmers. In 2011 they had 260 acres. By the end of 2012 they had bought 6,000 more acres, and now both agricultural products and additional investments are flowing more freely.

It can be real stunner when you internalize the uh-oh moment. It’s enough to make you want to dig a hole, climb in, and hide from what you’ve learned. Jason Bradford dug a hole and found not only the root of the problem, but also room to nurture the roots of a solution.

Entropia: Life Beyond Industrial Civilisation

by Samuel Alexander

When industrial civilisation collapsed in the third decade of the 21st century, a community living on a small island in the South Pacific Ocean found itself permanently isolated from the rest of the world. With no option but to build a self-sufficient economy with very limited energy supplies, this community set about creating a simpler way of life that could flourish into the deep future. Determined above all else to transcend the materialistic values of the Old World, they made a commitment to live materially simple lives, convinced that this was the surest path to genuine freedom, peace, and sustainable prosperity. Seven decades later, in the year 2099, a narrator emerges to describe the results of this remarkable living experiment. That is the premise of my new book, Entropia: Life Beyond Industrial Civilisation, and I’d like to briefly address the question: why did I write it?

In recent decades, much has been written in criticism of growth-based economics, and ecological economists have been leading the way in developing the most coherent alternative model — the steady state economy. However, with very few exceptions, little has been written on what daily life would actually be like in an ecologically sustainable economy. This makes it difficult to envision the alternative society that a steady state economy implies, and this is problematic, I feel, because if people cannot picture the alternative society, it is very difficult to desire it. And if people do not desire it, no social or political movement will arise to bring it into existence. For this reason I attempted, in Entropia, to describe in detail what everyday life might be like in a steady state economy. How would we feed ourselves? What clothes would we wear? What forms of transport and technology would we use? How much and what types of energy would we require? And what material standard of living would we have if we were to successfully decarbonise the economy? Most importantly, perhaps, what would the quality of daily life be like? Those are some of the questions the narrator addresses as he documents the economy, culture, and politics of Entropia, in the aftermath of the industrial age.

EntropiaIn answering those questions, the narrator highlights the point that sustainability proper, as opposed to greenwash, implies an extremely radical agenda for change. True sustainability is not merely about taking shorter showers, composting, and turning the lights off; nor is it about a carbon tax here, and a few wind turbines there. It requires a fundamental reorientation of the nature and purpose of economic activity. In particular, Entropia labours the point that a steady state economy must be based on lifestyles of material sufficiency, with the focus being on providing ‘enough, for everyone, forever,’ not universalising consumer affluence. Presently, the global economy is in gross ecological overshoot, while billions of people still live lives of material deprivation. To achieve sustainability in the overdeveloped world, the richest nations need to go through a process of planned economic contraction — or degrowth — on the path to a steady state economy. Technology will never be able to globalise consumer affluence, and the sooner we can introduce this point into public discourse, the sooner we can begin reimagining ‘the good life’ beyond consumer culture. A central theme of Entropia is that working toward sustainability in an age of converging crises, far from being a hardship, is actually an opportunity to rethink the nature of human progress. It suggests that the Great Transition needed will actually be in our interests, provided we work together and negotiate the changes wisely.

One criticism that may be levelled against the book is that it is set on small island and therefore lacks relevance to the rest of us, especially to those of us who live in dense urban or suburban contexts. Although I feel it would be a terrible misreading to take the book so literally, it is an objection that is worth anticipating. Of all literary genres, utopian writing is the genre that readers must always read metaphorically. Utopias are never about the society itself — utopia, of course, means ‘no place.’ Beneath the surface, utopias are always about the place that is not utopia — which is here and now. In writing Entropia it was certainly my intention to speak to our present situation, and this should be perfectly clear to all those who are prepared to read between the lines.

A second objection that may be worth anticipating is the objection that the genre of Entropia is confusing. To be honest, it probably is a confusing genre, because it is a book of fiction, and yet not a novel, as such. When people pick up a book of fiction, they tend to expect a novel, with all that implies, but I would rather call Entropia a fictional documentary, with a twist. When reading other works of eco-fiction, I generally felt disappointed with the author’s attempt to turn ideas into a narrative, and so I wanted to avoid that literary pitfall. Ecotopia, by Ernest Callenbach, for example, has many interesting and worthy ideas in it, but it tries to be a novel and, let’s face it, it is a terrible novel. In a similar vein, William Morris’s, News From Nowhere, which is the best in its genre, may well deserve its place in the history of ecological literature, but one can hardly deny that in many places Morris forces an essay into a narrative, without being able to disguise this clumsy literary technique. In my book, I was a bit more honest about the fact that what I wanted to do was describe a way of life, rather than tell a story. Again, Entropia is a fictional documentary not a novel, and should be read as such – not as entertainment (although I hope it entertains), but primarily as an attempt to enrich the conception of a steady state economy.

In all movements for change, including the movement for a steady state economy, it is important occasionally to hold up for examination what one understands to be the clearest expression of one’s highest hopes and ideals. That is what I have tried to do in Entropia, and that is how I would defend the inevitable charge of idealism. It is not that I think Entropia, as I describe it, will ever be achieved. It is just that unless we know where we want to end up, we can’t know in what direction we should be moving. My hope is that Entropia will provide some guidance on what it will actually take to transition to a steady state economy, as well as provide some deeper insight into what life might be like if we were ever to succeed.

Entropia was written by Dr Samuel Alexander, who is a lecturer with the Office for Environmental Programs, University of Melbourne, Australia. He teaches a course called ‘Consumerism and the Growth Paradigm: Interdisciplinary Perspectives’ in the Masters of Environment. He is also co-director of the Simplicity Institute and co-founder of Transition Coburg. He writes regularly at the Simplicity Collective and posts most of his academic essays at the Sufficiency Economy.

Slumlord Nation

by Eric Zencey

Eric_ZenceyAccording to architectural critic Charles Jencks, modern architecture died forty one years ago, on March 16, 1972. That’s the day that dynamite charges brought down the first of the Pruitt-Igoe public housing towers in St. Louis, Missouri. You’ve probably seen the pictures: a cloud of dust swirls out into the street while the tops of the buildings, still square, sag and tilt crazily. The photo captures rectilinear form giving way to dust and rubble: an iconic moment, an image that reminds us that entropy — the law of increasing disorder — haunts all our acts and works. In the distance you can make out another St. Louis icon, Eero Saarinen’s Gateway Arch, that gleaming stainless steel monument to the city’s role as mustering yard for the nation’s western expansion.

Jencks was wrong about modern architecture. So are those who blamed the residents of Pruitt-Igoe for the buildings’ decay and destruction. What brought those buildings down is a dynamic that’s very familiar in our modern economies — a dynamic that the conceptual lens of ecological economics lets us understand very clearly.

Pruitt-Igoe was a federally funded urban renewal project comprised of thirty-three high-rise apartment buildings, eleven stories each, on a 57-acre plot. It represented the best design practices for high-density urban development when it was built. It had green space (a benefit of building up instead of out). It had community function rooms on the ground floors and every third floor (which is where the novel, skip-stop elevators went, encouraging residents to think of every three floors as a neighborhood, since they’d pass and meet in stairwells). Within the limits of Missouri law, it was desegregated. The Pruitt towers, named for a black WWII aviator from Missouri, were for blacks, and the Igoe towers, named for a white Congressman, were for whites. The whole complex was designed for mixed incomes. Some apartments were rented at market rates to middle class families; others were subsidized, with rent limited to a percentage of household income. (Under welfare rules, these apartments could not have telephones or televisions and were available only to families that did not have an able-bodied wage-earner in the household.)

New and ultra-modern when they were built in the early 1950s, after less than two decades’ use the buildings had become a filthy, crime-infested, broken-windowed, high-rise slum, as bad as (and in many ways worse) than the housing they had been built to replace. In desperation the St. Louis Housing Authority consolidated the remaining tenants into a few buildings and demolished the others. The attempt at retrenchment failed. By 1976 the last remaining tenants had been relocated, the buildings razed, the site bulldozed. Today the acreage holds a couple of schools and the country’s largest accidental urban forest.

What brought the towers down, says one conventional (and racist) narrative, was the behavior of its residents. Despite the plan for a mix of income groups and separate-but-close mingling of races, the towers soon held just low-income African Americans, and they were responsible for trashing the buildings. The architect, Minoru Yamasaki (who went on to design the World Trade Center Towers, which came down under very different circumstances) gave credence to this interpretation when he allowed, “I never thought people were that destructive.” A slightly less racist version of this narrative notes that adolescent boys are always the prime perpetrators of vandalism, and that welfare regulations had the unintended effect of breaking up families, ensuring that quite a few adolescent males in the complex had no father figure at home. Vandalism and crime were the predictable result.

A different conventional narrative is told by some architectural critics, like Jencks, who find that the building themselves were at fault. The projects were too massive, too anonymous, too soulless to be successful in fostering neighborliness and a shared sense of pride in place. The public spaces of the complex, this theory says, became no-man’s-lands that residents avoided and hurried through. With no one caring for them, they fell into disrepair and bred crime, vandalism, trash, brutality.

Neither of those narratives comes anywhere close to capturing the complex truth, which is that the Pruitt-Igoe towers were brought down by an unfortunate collision of factors. Federal funding paid for construction, but operating costs were the responsibility of the city. The intended occupancy rate would have enabled rental income to cover these. But the population of St. Louis was undergoing an historic change; it fell from 857,000 to 622,000 between 1950 and 1970. Some of this was a general postwar exodus to the suburbs, fuelled by cheap gas, Veterans Administration mortgages, and the assembly-line methods of suburban construction pioneered in Levittown. Some — a great part of it — was white flight. In 1954 the Brown v. Board of Education of Topeka decision mandated the desegregation of public schools, and two years later a Missouri court ordered desegregation of public housing in the city. Middle-class whites left St. Louis for the suburbs, where housing costs and racial discrimination in sales and rentals — “redlining” — would preserve segregated schools for decades to come. With its middle-income apartments emptying and being re-let to impoverished black families, the Housing Authority could no longer support Pruitt-Igoe’s maintenance expenses.

The slum housing that Pruitt-Igoe replaced had become degraded and unhealthy for sound economic reasons. A slumlord maximizes his income stream by zeroing out maintenance costs, consuming the stored integrity of a building as income, and letting the building depreciate down to nothing. Tax law, which allows deductions for depreciation, makes this an even more lucrative strategy. Faced with an inadequate income stream, the public housing authority of St. Louis did what slumlords do: they reduced their budget gap by zeroing out maintenance expenses and sucking the integrity and usefulness out of their property.

The Pruitt-Igoe demolition offers a clear warning about resorting to the slumlord model (credit: St. Louis Post Dispatch).

The Pruitt-Igoe demolition offers a clear warning about resorting to the slumlord model (credit: St. Louis Post Dispatch).

As any businessman can tell you, if your operation can’t afford routine maintenance of its productive assets, your operation is in deep trouble. What you’ve got then isn’t a business plan but a plan to be a parasite.

Nature knows three kinds of parasites. One lives in a symbiotic relationship with its host, never diverting so much of the host’s life-energy as to constitute a threat to its continued well-being. (You don’t even notice the mites that live on your dead skin cells.) Another kind of parasite flourishes by consuming its host to death; like smallpox or the plague, it destroys what it feeds on and then jumps to another host. A third kind of parasite falls in between. It sucks a considerable amount of life from the host but doesn’t actually kill it; it achieves a kind of equilibrium, imposing a degraded and diminished life on its host. Tapeworms fall into this category, along with some chronic diseases, such as leprosy, malaria, and tuberculosis. Call it the slumlord model: sustainable, under certain conditions.

Unlike the things humans build, ecosystems (and, by and large, individual organisms within them) are capable of a high degree of self-repair. Any act of maintenance involves resisting entropic decline in a system by importing matter, energy, and design intelligence into a system to restore a valued and orderly arrangement. Broken windows don’t fix themselves. For that you need new glass and a glazier to install it. But damaged ecosystems do repair themselves, if they haven’t been degraded beyond recovery: they use physical nutrients, solar throughput, and the design intelligence of evolution to maintain and deepen their systems of orderly relations.

In his 1952 classic Soil and Civilization, Edward Hyams pointed out that humans have always been parasites on their host ecosystems. We divert some of the resource-energy of those systems and channel it through our bodies and societies before exhausting it, degraded, back into the host. Many, even most hunter-gatherer tribes lived in symbiotic relationship with ecosystems, colonizing part of nature’s food-energy flow but rarely threatening the integrity and continued life of the system as a whole. As agriculturalists, humans sometimes lived in balance with the soil community, never extracting more of its energy-fertility than the system could rebuild from annual solar inflow. But some agricultural societies mined their soil fertility, drawing it down faster than it could be replenished. They consumed the maintenance-energy of their host soils, and either jumped to another host or disappeared as their once-fertile land became sterile sand and gravel.

Today, the bulk of humanity functions as hydrocarbon-fueled industrial parasites — life-suckers whose ambitions include not just food security and reproduction but the accumulation of great material wealth. To gratify those ambitions we’ve used the stored capital of the planet (a finite stock of fossil fuels) to increase the rate at which we suck the maintenance out of planetary ecosystems. We’ve become a slumlord species: we cash out nature’s maintenance flows and spend our gains as income.

Symbiotic parasitism, which allows the host to flourish, is the only one of these roles that will give us an ecologically sustainable economy with a relatively high standard of living. The find-another-host strategy is clearly out: we’ve only got one planet, and we’ve built out to the edge of its capacity to hold us. The slumlord strategy won’t work, either. The typical slumlord doesn’t have to live in the slum that his self-interested behavior creates; his home is somewhere else. On a fully developed, fully occupied planet, there is no “somewhere else.”

Once upon a time, when the world held fewer humans, it seemed that there was room in it for slumlord parasitism. Saarinen’s Gateway Arch memorializes an epic transit, the opening of the American West, and it’s fitting that you can see it on the distant horizon in those iconic pictures of the Pruitt-Igoe demolition. Whatever else it memorializes, the Arch also marks the transit of a parasitic species looking for a new host, migrating in search of fresh ecosystems whose stocks of capital and maintenance energy could be sucked down, cashed out and spent as current income.

Eventually some humans learned that we ought not to turn our own environmental neighborhood into a slum. Many developed nations passed laws — in the U.S. there was the Clean Air Act, the Endangered Species Act, the Water Pollution Control Act — to ensure that we didn’t completely zero out the maintenance of the ecosystems that support us. But like slumlords comfortably housed in the suburbs, those in the industrialized countries continued to benefit from the draw-down of maintenance elsewhere in the system. Mostly we who live in the United States exported our damage to the undeveloped and less developed nations of the world, places willing to sacrifice natural capital and ecosystem integrity to the promise — not always fulfilled — of economic gain.

In St. Louis, slumlording depended on the existence of a class of renters who had no other choices: poverty and racism held African Americans in place, in housing that no one should have to endure. In the world at large, our slumlord practice is maintained by the dogmas of infinite-planet economics. We rely on the ideology of free trade, and the spurious argument that environmental quality is a luxury good, to tell the impoverished citizens of the world that if they’re patient enough and smart enough, they will someday live as we do — as if a political economy in which 5% of the world’s population uses 25% of the world’s resource flow could be expanded to include everyone. But there is just enough material progress to make the dogmas seem accurate: thanks to frantic expansion of the matter-and-energy stream that humans suck out of the planet, and to a decline in the U.S. share of that stream as its middle class disappears, once-poor countries like China and India are developing their own middle class consumerist economies. Meanwhile, our planetary habitation is being damaged and degraded even more rapidly. To most of us, in most places it looks okay, but that’s because we haven’t been schooled in the understanding we need in order to see the damage. Our ecological ignorance allows us to ignore the fact that we’re sucking the life-maintenance out of the planet.

The fate of the Pruitt-Igoe towers shows us the likely outcome of continuing to do that.

Eric Zencey is a Fellow of the Gund Institute for Ecological Economics at the University of Vermont and also teaches in the Graduate Architecture and Urban Planning programs at Washington University in St. Louis. He is the author most recently of Greening Vermont: The Search for a Sustainable State and The Other Road to Serfdom and the Path to Sustainable Democracy.