What You Won’t Learn In An Economics Degree: Ecological Economics

What You Won’t Learn In An Economics Degree: Ecological Economics

The UoM Post-Crash Economics Society were lucky to have Kate Raworth from the University of Oxford present her work on Ecological Economics. Ecological Economics is perhaps one of the most important ways of thinking alternatively about the economy, and creates a real conversation about sustainability and the economy’s place within the ecosystem. To view the economy as an ever expanding source of resources and focus our ambitions only on economic growth is futile, as the economy is bounded by the limits of the ecosystem imposed by nature.

Raworth’s depiction of an ecological model of economics raised the important question as to whether there is a counter design to the current system of debt, money creation, maximising shareholder return and increasing productivity in the pursuit of economic growth.  Such debates stem from the concept that we should not only consider whether such economic growth possible, but whether this type of exponential growth should even be desirable. It terms of an ethical argument, the earth’s resources have been depleted by industrialisation, investment in profitable industries such as oil and gas, and other processes that have taken from and polluted the environment to improve material conditions for humans. There is a trade off between too much environmental degradation and providing for humans. Raworth proposes the “Doughnut Model” that concludes our sustainable solution is a middle ground between the two: using the Earth’s resources both efficiently and cautiously. The inside limit of the “doughnut” is social foundation; the outside limit is the environmental ceiling; and to go beyond these respective limits would be detrimental to either human and economic needs or the balance of the ecosystem. Thus, the doughnut in itself is called “ a safe and just space for humanity” and this may be the counter-objective to economic growth that we should be aiming for.

 

When making decisions about production or consumption, humans should consider factors beyond price or utility. Such a goal requires careful consideration of certain planetary boundaries such as “what affects the existence of the planet?”; “how much greenhouse gas can we put in?”; “how much water can we take out?”, “what is killing the ocean food chain?”. Raworth also briefly brought up philosopher Michael Sandel’s idea that we cannot monetise morals and so we should allocate by what is right rather than just by the market. An understanding and appreciation of these considerations can create a counter-system, one that rethinks growth as the only desirable outcome. Ecological economics, therefore, takes a step away from the view of the economy as a closed system, towards one where it is affected by the influence of sociology, politics and philosophy in allocating resources “safely and justly”.

1 Comment

  1. The global economic system is open not closed. This is largely the problem. It continuously extracts raw materials and fuel from the planet gratis (extraction costs don’t score). If the planet were a proper stakeholder and charged for what is extracted and paid for what is returned (recycled) the system would become closed and the mechanism for a sustainable future established with little change to the processes of the global system per se. Of course the impact on policies, economic behaviour and priorities would be massive –what we need of course.

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