We may perceive global warming, biodiversity loss, tropical deforestation, spreading marine dead zones, chronic air/water pollution, land/soil degradation, plummeting sperm counts, etc., as separate problems, but it is more realistic and potentially more productive to recognize that all are symptoms of a singular phenomenon, gross human ecological dysfunction. This is a genuine global meta-problem; it is potentially fatal to civilization and, paradoxically, entirely self-induced.
Several of the most important causal mechanism have come together to produce a global economic system whose conceptual framing, operating assumptions and de facto practices are pathologically incompatible with the very ecosystems that sustain it. In the circumstances, eco-destruction is inevitable.
As the pace of economic change seems to only quicken, including rapid technological advance, today’s advanced economies face uncertainty from a number of directions, most of which have the potential to change established modes of thinking and the institutional arrangements that underpin basic economic organization. Labor-saving technological advances are accompanied by risks to jobs due to automation. Work is being made more insecure for a wide variety of workers and skill levels because of shifting capital-labor relationships. Regulatory systems are scrambling to adapt to new technologies in infrastructure planning or to the classification of workers under rapidly proliferating alternative work arrangements. Even the ties that bind groups of countries together in often long-standing bilateral and multilateral trade relationships are increasingly under strain with the rise of populist economic nationalism in some of the world’s largest economies. Crucial changes are taking place that risk eroding structures of opportunity, as well as public confidence in the institutions charged with economic policy making in many countries.
Automation has long been driven by impressive technology development and cost reduction. It may actually slow during 2020 as a result of a shortage of funds for capital investment, but the need to maintain greater social distancing in physical facilities and the pressure to reduce labor resources that are at risk of disease will lead to more robotic process automatization (RPA) in functions such as customer service, as well as in manufacturing. Automation may also reduce cost differences between domestic and foreign operations and so allow businesses to reduce their international exposure. Moreover, the coronavirus is presenting greater incentives for industries to harness innovation to reduce their external dependencies.
All economic theories/paradigms are elaborate conjectures and that none can contain more than a partial representation of biophysical, or even social, reality. If this is an important general limitation, we should be particularly concerned about today’s dominant neoliberal economic paradigm (the economics of capitalism). Neo-liberal models incorporate a stinted caricature of human behavior, virtually ignore socio-cultural dynamics and make no significant reference to the biophysical systems with which the economy interacts.
Ecology might be defined as the scientific study of the cooperative and competitive relationships that have evolved among organisms in ecosystems and how these relationships serve to allocate energy and material resources among constituent species. Similarly, economics might be defined as the study of economic behavior and the efficient allocation of scarce resources among competing users in human society. The parallels are obvious; moreover, since humans are of the ecosphere, and the economy extracts resources (energy and materials) from the ecosphere, economics should arguably be a branch of human ecology.
Regrettably, the conceptual foundations of the two disciplines have diverged since their beginnings. Neoliberal theory lacks any realistic representation of the energy and resource constraints, functional dynamics, social relationships, interspecies dependencies and time-dependent processes at the heart of ecosystems thinking. There is no ecology in economics. From the ecological perspective, human-induced global change – climate disruption, plunging biodiversity, etc.– is unambiguous evidence that our prevailing growth-based cultural narrative is seriously flawed. If we wish to re-construct the economy for sustainability our models must include a realistic representation of human behavioral ecology. These economic and ecological narratives are virtual polar opposites and it matters greatly which is the ‘truer’ social construct.
The world’s leading economies are facing not just one but many crises. The financial meltdown may not be over, climate change threatens major global disruption, economic inequality has reached extremes not seen for a century, and government and business are widely distrusted. At the same time, many people regret the consumerism and social corrosion of modern life. What these crises have in common is a reckless disregard for the future–especially in the way the economy is run. What is the probability that the ecosphere can withstand another doubling of human energy/material demand as is expected before mid-century? Can we devise new social constructs that override rather than reinforce peoples’ innate expansionist tendencies and selfish myopia? What might be done globally to avoid resultant tipping points and systemic collapse?
First step first:
- Acknowledge that collapse is a finite possibility and the usual outcome for societies whose leaders ignore evidential warning signs or are too corrupt or incompetent to act accordingly;
- Admit the theoretical simplicity and conceptual flaws in neoliberal market economics and capitalist expansionism;
- Embrace the need to socially construct a new foundation for economics that is consistent with bio-physical reality, beginning with today’s emergent ecological economics;
- Recognize that humans are bio-ecological beings, the most ecologically significant entity in all Earth’s ecosystems and subject to ecological and biophysical principles;
- Accept that the human enterprise is a fully-contained dependent sub-system of the non-growing ecosphere;
real-world economics review;
- Abandon relatively mechanical, linear, single equilibrium models for more dynamic, non-linear multiple equilibrium constructs of the integrated human eco-economic system;
- Shift the primary emphases of economic planning from quantitative growth and efficiency (getting bigger) toward qualitative development and equity (getting better);
- Forge economic theory that is consistent with the physical, chemical, and bio-ecological concepts governing both economic and ecological material transformations in the ecosphere;
- Accept the limitations of technology – in general, natural capital and manufactured capital are complements, not substitutes; some forms of natural capital are essential and non-substitutable.