Macroeconomy as microecosystem
To follow up on this post, it’s great when ecologists and economists start speaking the same language. Even better is when they form the US Society for Ecological Economics. If you’re the conference type they are having their third biennial conference next week.
Even if you won’t be in the Tacoma area, though, one of their policy briefs is of particular note. Written by Herman E. Daly of the University of Maryland, it covers “Economic Growth and Development.” But it has a very environmental twist.
It’s a Word document and it’s only 1.5 pages. Go read it. To further entice those terrified of commitment, two particularly poignant excerpts are below.
As the scale of the human subsystem (the economy) expands relative to the fixed dimensions of the containing and sustaining ecosystem, we necessarily encroach upon that system and must pay the opportunity cost of lost ecosystem services as we enjoy the extra benefit of increased human scale.
And the source of the title for this post:
[M]acroeconomists think of the macroeconomy as the Whole, not as a Part of some larger Whole. For them nature is not a containing envelope, but just a sector of the macroeconomy … But of course the real economy is a Part and it grows not into the Void, but into the rest of the ecosystem, and really does incur opportunity costs.
Measuring those costs, however, and determining when marginal benefits equal marginal costs (and therefore where growth should optimally stop), is a horse of a different color.