Section X: Reimagining and Reinventing Societies 
& Social Thought

Track 5: Ecological Economics

An invitation for a Dialogue on the origin, development, and future of Eco-Economics
—and its contribution to the development of an ecological civilization

Joshua Farley, University of Vermont 
& the Gund Institute, chair


Despite their many achievements, the impact on the world of the leading schools of economic thought—be it classical, neo-classical, institutional, Marxist, or heterodox— has not been kind to the natural world that sustains humanity and all other species.

A much-needed new economics must account for the biophysical constraints imposed by a finite planet, the capacity of humans to be cooperative and altruistic as well as competitive and egoistic, the need for a just distribution of wealth and resources, and ends other than material consumption and the maximization of monetary value. This new economics is in the process of being established, and the thought of Alfred North Whitehead has been helpful in forging it.

The ecological civilization that we must establish will require an economic system that can be sustained indefinitely and wished for everyone–an economy, in short, that supports rather than debilitates the natural evolutionary processes shaping our living planet. Our task in this track is to develop a supporting discipline of economics that guides our path to the system outcomes we seek.


Friday, June 5, 2015:

2-3:30 PM: Framing the problem: Building an economics that balances what is biophysically and behaviorally possible with what is socially, morally and psychologically desirable.


Yogi Berra reputedly said, “If you don’t know where you’re going, you might not get there”. The first task in building an economic system compatible with an ecological civilization is to determine the desirable ends of economic activity. This task demands that we also define whom the economy should serve: individuals alive today, weighted by their purchasing power; the human community, present and future; or all biotic communities on our living earth? Once goals have been defined, it is necessary to examine the available resources required to attain them, including raw materials, energy, and complex ecological processes. What is the current status of these resources and what are the trends affecting them? To whom should these resources belong, and how should they be allocated in order to achieve our desired ends? We must also assess human capabilities. What behaviors are humans capable of, and how do the economic, political and social institutions we create affect them?


4-5:30 PM: The starting point: Where are we now, and how did we get here?  


Building a new economics compatible with an ecological civilization demands a clear understanding of why the current economy and the economic theories that guide it will not suffice. Why has the current system generated so many ecological crises that threaten civilization itself? Why has it failed to meet the needs of so many? What ends does conventional economic theory strive to achieve and whose ends does it favor? How effectively does the economy achieve those ends? Who controls available resources and how are they allocated? What elements of the current system and ongoing trends can be harnessed towards alternative goals and institutions, and what must be abandoned? Yogi Berra reputedly also said “we might be lost, but we’re making great time”. If the relentless pursuit of continued economic growth is not the desirable end of economic activity, then we are lost, and no longer even making great time. Having the wrong destination may be worse having none at all.  


Saturday, June 6, 2015: Ecological Economics as part of the solution to the economic problem


11-12:30 AM: Tracing the development of a new discipline


Since the late 1960s, there has been a gradual increase in the number of significant works aiming toward an ecological economics. A brief survey of the insights from these publications would be helpful, both to persons just getting into the study of ecological economics, and to those attempting to grasp the contemporary state of ecological economics and its theoretical and practical problems. As the field has gained visibility, it has attracted a growing number of conventional economists who address environmental problems through a conventional lens that ignores the carrying capacity of the planet, prioritizes monetary metrics, and operates with a faulty notion of human nature. It has also attracted natural scientists seeking to use monetary valuation and market mechanisms to address environmental problems. Ironically, this is occurring even as a subset of mainstream economists are applying the behavioral sciences and empirical research to challenge the core assumptions of their own discipline and rebuild it on more scientific foundations. Is ecological economics now in danger of being subsumed into conventional economics, and if so, how can this be prevented? Can ecological economics work to rebuild the biophysical foundations of mainstream economics just as behavioral economics seek to rebuild its behavioral foundations? Or should ecological economics focus on exposing neoliberal economics as a combination of political ideology and faith-based beliefs, and seek to create and establish a true living Earth ecological economics as the defining economics of political discourse?


2-3:30 PM: Ecological economics and the problem of growth


Growth in economic activity has been a major feature of the civilization, beginning with the agricultural revolution and accelerating with the simultaneous emergence of the fossil fuel and capitalist economy, but the impacts of that growth are highly ambiguous. Indeed, there is abundant evidence that the scale of the economy now exceeds the carrying capacity of the earth. In an ecological civilization, resource extraction and waste emissions (collectively known as throughput) cannot exceed the productive or absorptive capacities of regional and global ecosystems, and quantitative economic growth must halt before its highly uncertain and potentially irreversible ecological costs begin to exceed its benefits. However, many people must consume more simply to satisfy basic human needs, and in the current system low or negative economic growth is typically accompanied by growing poverty, misery and unemployment. How can we reduce the physical throughput of the economy as a whole while ensuring the poor can ensure basic needs? Many people have a negative reaction to terms like “degrowth” or “steady state economy”. How do frame the needed transition from quantitative increases in global consumption to qualitative improvements in human well being? What institutions would be required to ensure that economic activities do not threaten the vitality of the living earth, that benefits are fairly distributed, and that ecological costs do not exceed economic benefits?



4-5:30 PM: Just Distribution and Ecological Economics


Mainstream economics is not just anthropocentric but plutocentric—it strives to satisfy the subjective preferences of individual humans living today weighted by their purchasing power. What would justice for all look like in a polity and economics that took the care of the larger ecosphere seriously, and valued the poor as well as the rich? What would the notions of freedom, equality, and community look like in an ecological civilization, especially when it comes to the distribution of scarce and essential resources, within and between generations?



Sunday, June 7, 2015: Ecological Economics in the context of the drive for an ecological civilization


11-12:30 AM: Current trends driving the transition to an ecological economy


A number of current trends make it obvious that the current economy is not sustainable, fair or efficient, and is driving people to pursue other alternatives. Climate change, resource depletion and other environmental problems are driving a “degrowth movement” that calls for reversing the sacrifice of social relationships and the environment on the altar of overconsumption, as well as the transition town movement in which small communities actively seek to build more sustainable communities. A modern financial system that prioritizes destabilizing speculation over productive investment and systematically concentrates both wealth and political power in the hands of a small minority is driving a push for the decentralization and democratization of finance and money creation, a more equitable distribution of wealth and power, and the restoration of the commons. Growing evidence that society’s most serious challenges cannot be solve through selfish competition is driving the development of economic institutions based on cooperation and altruism. Can a new economics support these trends? What institutions would promote them? How do we scale these institutions to address global problems? How do these institutions affect human behavior, and how does this recursive process affect a new economics?



2-3:30 PM: Frontiers of Ecological Economics


Donella Meadows identified numerous leverage points for effecting change in complex systems. The most powerful levers include changing the goals of a system (what is socially, ethically, and psychologically desirable), and changing the rules and institutions that guide the system. Efforts to redefine and measure system goals include the Index of Sustainable Economic Welfare (ISEW), the Genuine Progress Indicator (GPI), Gross National Happiness, and others. Are these goals and measures adequate, or must we develop better alternatives? Examples of institutions compatible with an ecological civilization include common ownership (for this and future generations) of resources created by nature and society as a whole, more democratic ownership of capital, and rights for nature. Which of these institutional alternatives are most compatible with an ecological economics, and why?


4-5:30 PM: An “Action Plan” for the further development of ecological economics and its contribution to the building of an ecological civilization


Our last session will survey where our dialogue on the ecological economics has led us, theoretically and practically—and will result (we hope) in an “action plan” for further work, theoretically and practically.


Important Websites

 Center for Advancement of the Steady State Economy (CASSE)

Living Economies Forum

 International Society for Ecological Economics (ISEE)

 The Other Economic Summit (TOES)

Yes! Magazine


Initial Bibliography

 Berry, Wendell. What Matters? Economics for a Renewed Commonwealth. Berkeley, CA: Counterpoint Publishers, 2010.

 Cobb, Jr., John B. and Herman E. Daly, For the Common Good: Redirecting the Economy Toward Community, the Environment, and a Sustainable Future. Boston, MA: Beacon Press, 1989.

 Daly, Herman E. and Joshua Farley, Ecological Economics: Principles and Applications. Washington, DC: Island Press, 2004.

 Daly, Herman, Steady-State Economics (2nd Edition). Washington, DC: Island Press, 1991.

___________. Beyond Growth: The Economics of Sustainable Development. Boston: Beacon Press, 1997.

 ___________. Economics in a Full World, in Scientific American, September, 2005, pp. 100-107.

 Czech, Brian. Supply Shock: Economic Growth at the Crossroads and the Steady State Solution. GabriolaIsland, BC: New Society Publishers, 2013.

 Farley, Joshua, ed. Herman Daly Festschrift (e-book), in Encyclopedia of the Earth, National Council for Science and the Environment, Washington, DC.

 Georgescu-Roegen. The Entropy Law and the Economic Process. Cambridge, MA: Harvard University Press, 1971.

 Heinberg, Richard. The End of Growth: adapting to Our New Economic Reality. New Society Publishers, 2011.

Korten, David. Change the Story, Change the Future: A Living Economy for a Living Earth. Agenda for a New Economy: From Phantom Wealth to Real Wealth. San Francisco, CA:Berrett-Koehler, 2015.

___________. Agenda for a New Economy: From Phantom Wealth to Real Wealth. San Francisco, CA: Berrett-Koehler, 2009.

___________. The Great Turning: From Empire to Earth Community. San Francisco, CA: Berrett-Koehler, 2007.

 McKibben, Bill. Deep Economy: The Wealth of Communities and the Durable Future. New York, NY: Henry Holt and Co., 2007.

 O’Neill, D. W. Measuring Progress in the Degrowth Transition to a Steady State Economy. Ecological Economics 84:221-231, 2012.

 Schumacher, E. F. Small is Beautiful: Economics as if People Mattered. New York, NY: Harper and row, 1973.

 Speth, James Gustave. The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability. New Haven, CN: Yale University Press, 2008.

 Zencey, Eric. Mr. Soddy’s Ecological Economy, in the New York Times, April 11, 2009.