The Bankruptcy of Economics: Ecology, Economics and the Sustainability of the Earth

202 Pages·1999·10.795 MB·English

by  Joseph Wayne Smith, Graham Lyons, Gary Sauer-Thompson (auth.)

THE BANKRUPTCY OF ECONOMICS: ECOLOGY,
ECONOMICS AND THE SUSTAINABILITY OF THE
EARTH
Also by Joseph Wayne Smith
BEYOND ECONOMICS: Postmodernity, Globalization and National
Sustainability (with Gary Sauer-Thompson)
HEALING A WOUNDED WORLD (with Gary Sauer-Thompson and
Graham Lyons)
IMMIGRATION AND THE SOCIAL CONTRACT (editor with
J. Tanton and D. McCormack)
IS THE END NIGH? (with E. Moore and Graham Lyons)
Also by Graham Lyons
HEALING A WOUNDED WORLD (with Gary Sauer-Thompson and
Joseph Wayne Smith)
IS THE END NIGH? (with E. Moore and Joseph Wayne Smith)
Also by Gary Sauer-Thompson
BEYOND ECONOMICS: Postmodernity, Globalization and National
Sustainability (with Joseph Wayne Smith)
HEALING A WOUNDED WORLD (with Joseph Wayne Smith and
Graham Lyons)
The Bankruptcy of
Economics: Ecology,
Economics and the
Sustainability of the
Earth
Joseph Wayne Smith
Senior Research Fellow
Department ofG eography
University ofA delaide
Australia
Graham Lyons
Director, Glen Bold Cattle Ranch
Echunga
Australia
and
Gary Sauer-Thompson
Lecturer in Philosophy
Flinders University of South Australia
Adelaide
Australia
First published in Great Britain 1999 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
A catalogue record for this book is available from the British Library.
ISBN 978-1-349-27571-7 ISBN 978-1-349-27569-4 (eBook)
DOI 10.1007/978-1-349-27569-4
First published in the United States of America 1999 by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
ISBN 978-0-312-21424-1
Library of Congress Cataloging-in-Publication Data
Smith, Joseph Wayne.
The bankruptcy of economics: ecology, economics and the
sustainability of the earth /Joseph Wayne Smith, Graham Lyons, and
Gary Sauer-Thompson.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-312-21424-1 (cloth)
1. Sustainable development. 2. Economics. 3. Environmentalism.
.
4. Ecology. I. Lyons, Graham, 1936- II. Sauer-Thompson, Gary.
III. Title.
HC79.E5S5355 1998
333.7-dc21 97-52375
CIP
© Joseph Wayne Smith, Graham Lyons and Gary Sauer-Thompson 1999
Softcover reprint of the hardcover 1st edition 1999
All rights reserved. No reproduction, copy or transmission of this publication may be made
without written permission.
No paragraph of this publication may be reproduced, copied or transmitted save with
written permission or in accordance with the provisions of the Copyright, Designs and
Patents Act 1988, or under the terms of any licence permitting limited copying issued by
the Copyright Licensing Agency, 90 Tottenham Court Road, LondonW 1P 9HE.
Any person who does any unauthorised act in relation to this publication may be liable to
criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified as the authors of this work in
accordance with the Copyright, Designs and Patents Act 1988.
This book is painted on paper suitable for recycling and made from fully managed and
sustained forest sources.
10 9 8 7 6 5 4 3 2
08 07 06 05 04 03 02 01 00
Contents
Preface vii
1 The Crisis of Civilization: Economic Globalization
and the Shredding of the World 1
2 The Bankruptcy of Economics 15
3 Fingernails on the Mind's Blackboard: Universal
Reason, Postmodernity and the Limits of Science 55
4 Civilization's Wake: Ecology, Economics and the
Roots of Environmental Destruction and Neglect 89
Notes 127
Bibliography 141
Index 187
Preface
There is an over-supply of books on the market today criticizing orthodox
economics. Bookshop shelves also sag from the weight of ecology and
environmental books telling the gloomy story of humankind's war against
nature and our impending doom unless we change our ways in an act of
ecological redemption. There is also a growing number of books
constituting something of an "environment backlash movement" or "the
revenge of the economist" movement, allegedly showing that
environmental threats are exaggerated or non-existent and so business can
proceed as usual.
The existence of yet another book in any one of these genres requires
justification. Our justification for this book is that it is not in any one of
these genres. It is more precisely a "state of the debate" book which
attempts to give an accurate, precise but concise account of the intellectual
battles that are being fought around the broad subject theme of "Ecology,
Economics and the Sustainability of the Earth". In short it is about the
survival of life, human and non-human on this planet. Our aim is to give
students and the educated and inquiring general reader an inroad into these
debates as well as a global overview that no other book, we believe, has
given. The book should be accessible to anyone who has available good
dictionaries of economics, ecology and philosophy.
Over and above this though, we advance our own vision of the modern
world and the future. Our vision is of coming global chaos, anarchy and
the breakdown of social and ecological systems. In our opinion the
intellectual systems of modernism such as orthodox economics are
exhausted and bankrupt, but are still influential enough to supply
ideological support to a technoindustrial system which is out of control.
The environmental crisis, we will argue, is a product of our own hubris
insolent pride and arrogance-brought about by our belief that human
ingenuity and technological sophistication will solve every problem. They
will not. In the Greek drama, as in the tragicomedy of our existence,
nemesis-a downfall caused by an agent of retributive justice-follows
hubris. The aim of this book is to describe both the hubris and the nemesis
of modern economically rational cyber-sophisticated "man". Unlike other
gloom 'n' doom books on the market, we doubt whether modernist "man"
will change his/her ways in time. It is time for this stark possibility to be
fearlessly discussed.
vii
1 The Crisis of Civilization:
Economic Globalization
and the Shredding of the
World
There should be a special word for the feeling of dread caused by
reading the works of macroeconomists. As the pages turn, you
gradually realise that you are merely the tiniest of tiny cogs in a
global machine with no one at its helm, and that your culture, your
life and even your own private beliefs are products of economic forces
that you cannot comprehend .... Perhaps it's time for deep ecology
and the rejection of materialism. (Editorial (New Scientist), 1996, 3)
The achievements of economic theory in the last two decades are both
impressive and in many ways beautiful. But it cannot be denied that
there is something scandalous in the spectacle of so many people
refining the analyses of economic states which they give no reason to
suppose will ever, or have ever, come about. It probably is also
dangerous. Equilibrium economics, because of its well known welfare
economics implication, is easily convertible into an apologia for
existing economic arrangements and it is frequently so converted. On
the other end of the scale, the recent, fairly elaborate analysis of the
optimum plans for an economy which is always in equilibrium has,
one suspects, misled people to believe that we actually know how an
economy is to be controlled. (Hahn, 1970, 1-2)
It is economic policies which have made life insecure for the majority
of young people in advanced Western nations that has resulted in
negative population growth. The supporters of the New Right are
practicing genocide on their own populations. (Gare, 1993, 25)
THE SHREDDING OF THE WORLD
The dominant religion in the developed world today is Economicism.
Economicism, like religions it has superceded, such as Christianity, has a
tripartite organizational structure-a Holy Trinity if you like. For
Economicism, the science of economics corresponds to the Father; high
1
2 The Bankruptcy of Economics
technology and the faith that scientific (primarily physical scientific)
investigation will solve humanity's major environmental and social
problems (a doctrine known as scientism) corresponds to the Son, and the
Holy Spirit is the process of economic globalization, the increasingly free
and liberal movement of physical and financial capital, information, labor
and migrants around the globe. The claim that economics is a religion of
materialism and consumerism, that economic progress will bring about a
golden age, "the route of salvation to a new heaven on earth, the means of
banishing evil from the affairs of mankind" (Nelson, 199lb, xxii}, has
been argued for in some detail by Robert H. Nelson in his brilliant book
Reaching for Heaven on Earth: The Theological Meaning of Economics
(Nelson, 199lb). In this book we shall show that the religion of
economics, materialism and consumerism-Economicism-is a bankrupt
world view, that is not only rationally and scientifically untenable, but is
also leading humanity towards inevitable destruction.
The manifestations of economics (especially its dominance in the
sphere of public policy}, high technology, scientism and economic
globalization, are unquestionably the dominant forces now shaping the
geopolitical contours of the twenty-first century. They are not independent
and distinct phenomena; like the entities of the Christian Trinity they seem
to be ontologically and causally dependent upon each other. More simply,
they depend upon each other for their existence and interact and mutually
influence each other.
Economics in the 1990s-contrary to Robert Heilbroner and William
Milberg's argument in The Crisis of Vision in Modern Economic Thought
(1995, 96)-has not made a retreat from the policy arena. On the contrary,
free market or laissez-faire economists have had a substantial impact upon
the societies of the developed Western world, so much so that our time is
rightly called "the Age of the Economist" (Lux, 1990, 1). Economists are
not only key advisors to governments-but more importantly
economists have supplied the allegedly rational and scientific justification
for a major revolution in government policy in the West. This revolution
is the privatization revolution or "government by the market" (Self, 1993).
Privatization is best known to us through policies such as the sale of
government businesses, utilities and community resources to private
transnational corporations (Ayers & Braithwaite, 1992; Cunningham,
1994; Stretton & Orchard, 1994). This issue is seen in many public policy
debates today, such as the issue of the funding of universities and scientific
research (Kealey, 1996; Klug, 1996; Pavitt, 1996).
In many cases though, privatization policies are only a thinly
disguised measure for economic globalization. We illustrate the point with
an example taken from the chaotic politics of our home city Adelaide,
South Australia. At the time at which a draft of this chapter was being
prepared (October, 1996}, the "Objectives for the New Governance of the
The Crisis of Civilization 3
City of Adelaide", Schedule 2, Local Government City of Adelaide Bill
1996, was before the South Australian Parliament. This Bill was to
eliminate the Adelaide City Council and the people's right to vote for and
elect members of Council. It was to replace the Council, a level of local
government, with three Commissioners (that magic number again),
answerable only to the State government. Council rates taken from
residents would have been used (without their consent) to "represent and
project the cultural and economic life of Adelaide and South Australia to
growing regional markets and the emerging world of global
communications"; "attract capital investment in a competitive global
market"; and "support the growth of educational and information
technology services to the Asian region" (Draft, Local Government, City
of Adelaide Bill, (Parliament of South Australia, 1996)). We can see here
all three elements of the world view of Economicism connected in this
example. Fortunately, the program to dismantle the Adelaide City Council
was abandoned after the South Australian Premier Dean Brown was
replaced by Mr John Olsen, but the example remains an instructive one.
The ideology of governments doing less and letting the market govern
rests upon the acceptance of free market economics or neoclassical
economics (which we characterize in more detail below) and public choice
theory, the application of economic methodology to politics, non-market
decision-making and to other areas of social life (Becker, 1976; Buchanan
& Wagner, 1977; Mueller, 1979; Hirshleifer, 1985; Buchanan, 1986,
1988; Hindess, 1988, 1989; Sugden, 1991; Pettit, 1993, 1995). According
to Self: " ... the main thrust of public choice writing, and still more of
its political influence, has been to discredit democratic government and
extol the market system" (Self, 1993, xi).
Another major force shaping the geopolitics of the world is the
process of economic globalization (Dicken, 1992; Hindess, 1994 ). Kenichi
Ohmae, an enthusiastic supporter of economic globalization, describes this
brave new globalized world in his book The Border/ess World: Power and
Strategy in the Interlinked Economy as follows:
In recent decades we have watched the free flow of ideas, individuals,
and industries grow into an organic bond among developed economies.
Not only are traditionally traded goods and securities freely exchanged
in the interlinked economy, but so too are such crucial assets as land,
companies, software, commercial rights (patents, memberships, and
brands), art objects, and expertise.
Inevitably the emergence of the interlinked economy brings with
it an erosion of national sovereignty as the power of information
directly touches local communities; academic, professional, and social
institutions; corporations and individuals. It is this borderless world