Economics of the Anthropocene Age

292 Pages·2017·1.931 MB·English

by  Figueroa, Adolfo

Economics of the
Anthropocene
Age
ADOLFO FIGUEROA
Economics of the Anthropocene Age
Adolfo Figueroa
Economics of the
Anthropocene Age
Adolfo Figueroa
Pontifical Catholic University of Peru
Lima, Peru
ISBN 978-3-319-62583-6 ISBN 978-3-319-62584-3 (eBook)
DOI 10.1007/978-3-319-62584-3
Library of Congress Control Number: 2017951394
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To the working class of the world
P
reface
The economic growth process of the world economy in the
post–World War II era has shown important empirical regu-
larities. These include increasing per capita income over time,
the persistence of a high and rising degree of inequality, and
continuous degradation of the biophysical environment. In
this period, per capita income has grown very rapidly, as never
before, and so has income inequality. Environmental degrada-
tion, as measured by pollution of the atmosphere and climate
changes, has also made a big jump in this relatively short
period of human history. This is what empirical studies show.
Why and How Has Human Society Come to This Situation?
The pioneering work of Nicholas Georgescu-Roegen on
bio-economics introduced the laws of thermodynamics into
the economic process and was then able to explain why eco-
nomic growth leads irrevocably to increased degradation of
the biophysical environment. Thus, the correlation noted
above between environmental degradation and economic
growth in the world economy has been given a scientific
explanation. Environmental degradation is the outcome of
human actions; it is anthropogenic.
vii
viii PREFACE
Earth science studies have gone even further. They have
shown that the degradation of the biophysical environment in
the last few decades has been very significant. Changes have
occurred not only in the atmosphere, but in geological pro-
cesses, which are also the result of human actions. The geo-
logical markers of change include waste accumulation of
radioactive elements, plastic and concrete particles, and nitro-
gen and phosphorous in soils, which have become significant
since the 1950s; in addition, wildlife is being pushed into an
ever-smaller area of the Earth. According to these studies,
human activity is the major force changing the Earth’s behav-
ior, of which climate change is just one. Furthermore, they
argue that the Holocene Epoch (“the new whole”) has ended,
after 12,000  years of duration, and that we have already
started (around the 1950s) a new epoch, which has been
called Anthropocene (“the age of humans”).
In the geological timescale, “epochs” correspond to the
very long term, thousands and millions of years. In the social
sciences, the relevant timescale runs for shorter periods, such
as generations. Therefore, instead of the Anthropocene
Epoch, we may use the Anthropocene Age to refer to the period
initiated in the 1950s in which the Earth’s behavior has
changed in terms of pollution and climate. However, we
should keep in mind that human actions not only are altering
the Earth’s climate behavior but are changing geological pro-
cesses as well. We humans are destroying our planet, our only
known ecological niche, and are thus endangering our sur-
vival as a biological species.
The question of the persistent inequality accompanying
economic growth in the world economy is much harder to
explain. The economic principles governing income distribu-
tion are society specific. The same can be said about economic
growth itself. Therefore, the interrelations between economic
PREFAC E ix
growth, income distribution, and biophysical degradation can
only be studied with reference to a particular social context.
The object of this book is to explain those interrelations in the
social context of the capitalist system.
The empirical regularities of the economic growth process
under the capitalist system show the same traits as were found
for the world economy, namely, an increase in per capita
income accompanied by increasing inequality and increasing
degradation of the biophysical environment. While rising per
capita income over time is considered the main objective of
the economic growth process, the other two can be seen as its
side effects. However, the side effects have social conse-
quences, leading to social maladies. As will be shown in this
book, a degree of income inequality that is high and persistent
leads to more acute social conflicts and social disorder, such as
terrorism, illegal migration, illegal economic activities, urban
violence, criminality, and insecurity. Increasing degradation of
the environment—pollution and climate change—is in turn
conducive to human health problems and hazardous human
life and then to social conflicts and social disorder as well.
According to the World Bank data set, the countries that
constitute the capitalist system represent nearly 70% of the
world population and produced nearly 85% of the world out-
put by 2005. The same source indicates that these percent-
ages were 21% and 11% in the case of China (a non-c apitalist
country). China’s output has grown very fast in the last
decades, but its level is still relatively small in the world out-
put. Therefore, the environment problem is highly dependent
on the growth behavior of the capitalist system and we may
safely link changes in the former to changes in the latter.
To be sure, clean skies and social order are two important
public goods in human life, for they imply healthier, more
peaceful, and less hazardous human society. However, both
x PREFACE
public goods have been degraded in the economic growth
process. Therefore, the continuous rise in per capita income—
the definition of economic growth—has been accompanied by
rising income inequality and continuous environmental deg-
radation, which have bad social consequences, namely, social
maladies. The economic growth process has meant quantita-
tive and qualitative changes: economic growth with social
maladies. Considering the 200 years of capitalist develop-
ment, economic growth with social maladies is a recent phe-
nomenon. According to historian Eric Hobsbawm, we have
lived in the age of violence since the 1960s. Therefore, in the
age of economic growth, we live in an increasingly richer but
increasingly inhospitable world.
The facts discussed above indicate that economic growth,
income inequality, and environmental degradation are highly
correlated. Beginning in the 1950s, and as never before, capi-
talism has experienced rapid economic growth accompanied
by high levels of inequality and significant environmental deg-
radation, so significant that the Earth has entered into another
age: the Anthropocene. The question is to disentangle these
correlations and identify the underlying causality relations.
However, this question has not been a significant part of eco-
nomic research.
By introducing the laws of thermodynamics into the eco-
nomic process, Georgescu-Roegen created the field of bio-
economics. However, bio- economics refers to the physical not
to the social relations of the economic process. Hence, bio-
economics needs to be integrated into a social context, into an
economic theory. Indeed, in a letter of 1974, Marxian
economist Paul Sweezy criticized Georgescu-Roegen for
abstracting environmental problems from their social context.
Recently, this author has published a book with the title
Growth, Employment, inequality and the Environment. Unity
PREFAC E xi
of Knowledge in Economics, which has indeed placed bio-eco-
nomics in the social context of a capitalist system. This book
has integrated Georgescu-Roegen’s bio-e conomics analysis
into a particular social context and developed the unified the-
ory of capitalism. The unified theory is able to explain why the
increases in per capita income, environmental degradation,
higher income inequality, and a higher degree of social mala-
dies have all come together. In the economic growth process,
they constitute the endogenous variables, whereas the power
structure—the initial inequality in the individual endowments
in economic and political assets—is the exogenous variable,
the ultimate factor determining that outcome. A concentrated
power structure is the ultimate factor that explains why capi-
talism operates in this way.
What Does Remain to Be Explained?
The aim of scientific knowledge is to attain error-free knowl-
edge. The findings of the unified theory imply that, regarding
social maladies, capitalism is not a self-regulated system.
Capitalism is unable to reduce or eliminate social maladies
endogenously. This is too important a conclusion to be left
right there. Therefore, one should insist on the question, why
is capitalism unable to self-correct social maladies? The unified
theory explains why the economic elites do not have the cor-
rect incentives to pursue the common good. What about the
role of democracy? Economic growth with social maladies is
indeed the outcome of democratic capitalism. This is certainly
a scientific paradox. What about the role of the altruistic drive
of human behavior? Under collective risk, such as unbearable
social disorder and the survival of the human species, why
have people not changed their behavior toward altruism to
eliminate social maladies and seek to save the species?
The role of these factors—democracy and human drives—
on the outcome of economic growth with social maladies