We are either at the forefront of the struggle to protect the earth as a place of human habitation (and as a home for innumerable species) or we are on the side of the system's creative exterminism of the Earth system as we know it.
Steve Keen has “developed the first explanation of production in which energy plays an essential role, opening up the possibility to finally integrate economics and ecology.”
As I have mentioned in an earlier diary there are microfoundations for Keen’s macroeconomic research enterprise, understanding that the microeconomic, spatial econometric models for regional political economy need to be built on geographic models that appreciate such analytic possibilities. Commons are by social necessity, local, like governmentality.
If all politics are local, then perhaps all political ecologies ensure the institutional importance of a local state.
Historians of areas like Silicon Valley still should acknowledge that such places incubate capital both terrestrially and virtually. The presence of Russian money there recently highlighted in #TrumpRussia and dividing California has as much to do with its informal economy as its venture capital effects. (Saxenian)
An ecosocialism appreciates the political ecology that might for example appropriate regional energy utilities to return them to the status of public goods and natural monopolies (sic). Ecosocialism requires further discussion of public utility ownership as a state-owned enterprise at larger scales beyond the municipal level. This is where a regional political economy approach integrates with political ecology.
Political ecology is the study of the relationships between political, economic and social factors with environmental issues and changes. Political ecology differs from apolitical ecological studies by politicizing environmental issues and phenomena.
What is Ecosocialism? Ecosocialism is a vision of a transformed society in harmony with nature, and the development of practices that can attain it. It is directed toward alternatives to all socially and ecologically destructive systems, such as patriarchy, racism, homophobia and the fossil-fuel based economy.
Institutional economics emphasizes a broader study of institutions and views markets as a result of the complex interaction of these various institutions (e.g. individuals, firms, states, social norms). The earlier tradition continues today as a leading heterodox approach to economics.
Two changes were instrumental. First were changes in the field of economics at the start of the century. Conventional economists were smitten by Darwin’s ideas of competition, applying it to markets and business. But a number of critical economists looked instead to the new science of ecology for inspiration.
Their leading thinker was Thorstein Veblen. Based at Chicago, Veblen began his career with a claim in 1898 that economics should be "an evolutionary science". He believed economists should account for "the sequence of change in the methods of doing things" as part of "an unfolding process". His premise was that "all economic change is a change in the economic community, a change in the community’s methods of turning material things to account. The change is always in the last resort a change in habits of thought."
Prevalent habits of thought and action were what he termed "economic institutions". One such institution is the frame of mind that understands every encounter as part of a competitive battle.
Veblen suggested that, if economics were to be an evolutionary science, it should not launch its analysis from that particular institution. Like the new ecologists, economists should ask how these institutions change over time so as to create novel forms of association in a community.
With that, some economists started to think in terms of the evolving structure of relationships in the countries where they worked, a totality that Veblen had called "the economic community".
Along with other developments in the field, institutional economics offered a framework for analysis, but this was hardly what propelled the widespread adoption of the concept of the national economy. That resulted from another change: the collapse of colonial empires into "independent" nations in the 20th century.
www.open.edu/...
This brief (8 minute) chat concludes my conversation with Martin, with the topic changing from macroeconomics, the Australian economy and housing market, to the link between economics and ecology.
I start with the only school of thought in economics to get this right: the Physiocrats, who predated Adam Smith and the Classical School. Though they didn't use the word "energy"--the word wasn't even invented until 1809, some three decades after the Physiocrats basically disappeared in the political maelstrom of revolutionary France--and spoke instead as the "free gift of Nature" as the source of all production.
They were right, and economists ever since--including Smith--have been wrong, by omitting the role of energy in production.
I worked out how to introduce this properly two or three years ago, and am now working with atmospheric physicists and mathematicians to formalise the mathematics, thanks to a grant from the NIESR's Rebuilding Macroeconomics project.
As part of this work, I have checked out what Neoclassical economists like Nordhaus have done, and I have been truly horrified: they have simply assumed that the weak, nonlinear relationship between temperature and GDP today can be used to predict what will happen with global warming over time.
This is beyond moronic. It is far, far worse than the nonsense model of Loanable Funds that let them ignore the role of credit in macroeconomics, leading to their inability to see the financial crisis coming, when, if you looked at credit and private debt, an impending crisis was obvious.
I cover this in detail here with Martin. If you're a supporter on Patreon, many thanks for enabling to fight to bring this dangerous profession to heel. If you're not, please consider signing up and helping out. Just like Ptolemaic Astronomers received the Church's largesse while visionary astronomers like Copernicus and Galileo struggled, Neoclassical economics control the purse strings of academic funding, and only the public can provide the support that true contrarians like me need to try to save us from their idiocy.
Climate Change,
Ecology,
Macroeconomics,
Neoclassical Economics,
Nordhaus