Economics v. the Earth: New Book Explores the History of a Tense Relationship

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Yves here. This post gives an overview of Western thinking about man’s relationship with nature, and specifically, how exploitative it should properly be. Even though philosophers often led these discussions, they influenced economic debates. As the Industrial Revolution produced a great upward march in living standards, few were willing to consider that there might be limits.

By Lynn Parramore, Senior Research Analyst at the Institute for New Economic Thinking. Originally published at the Institute for New Economic Thinking website

On June 7, 2023, New Yorkers ventured outside to find their city choked in putrid orange smog that blocked the light of day. Smoke blown south from drought-fueled Canadian wildfires eventually dissipated, only to return as a brownish haze just in time for Fourth of July weekend. Many celebrants canceled their outdoor plans.

‘We are truly the first generation to feel the real effects of climate change,” said New York Governor Kathy Hochul. Big Apple inhabitants, already getting used to fretting about destructive hurricanes stoked by warmer oceans, now add out-of-control forest fires burning hundreds of miles north to their list of climate anxieties. It’s getting harder to ignore the possibility that if their children lived to the year 2100, they might see actually New York City lost to rising seas, along with Mumbai, Shanghai, and Miami.

Canadian fires sent a smoke signal: the path of Western capitalism, which runs right through Wall Street, could end in a climate apocalypse.

In their new book, Scarcity: A History from the Origins of Capitalism to the Climate Crisis, historians Fredrik Albritton Jonsson and Carl Wennerlind warn that capitalist societies will have to overhaul the way we interact with the planet in order to avoid unthinkable consequences. They trace the key economic concept of scarcity as it developed over five hundred years of European thought, showing how a particular interpretation helped bring us to the trouble we’re facing.

The relationship between the economy and nature has been considered by thinkers all the way back to Aristotle. But as Jonsson and Wennerlind show, the topic gained center stage in the seventeenth century in the form of a new enthusiasm for controlling nature. During this period, thinkers like Francis Bacon spread the notion that with the help of science, humanity could bring nature under control and force it to yield its riches. The sky was no longer the limit of our desires.

The authors divide historical views of scarcity into two camps. “Cornucopians” like Bacon held that nature could be mastered to satisfy boundless human wants – a position that found its way to dominance in the West by the end of the 19th century, most recently promoted by neoclassical economists. As Jonsson and Wennerlind see it, economists under the sway of cornucopianism came to believe in a “dream of infinite substitutability” whereby natural resources were always available, and if something grew scarce, no problem — a substitute could be found. For example, if rainforests vanished, the price of goods associated with them would increase, thus lowering demand and sparking innovation to yield substitutes.

The authors outline how over the last century, most mainstream economists have been selling the idea that what we need to do is to use natural resources efficiently and develop science and technology to maximize economic growth. The basic premise: more is almost always desirable, the cheaper the better, and we can have it all without destroying the planet. The magic of market forces would take care of any environmental problems.

The authors liken this fantasy to the fervent visions of progress among 17th-century alchemists.

Jonsson and Wennerlind refer to a second group of ideas about scarcity as the “Finitarian” tradition, focused on limits to power over nature and the need to rein in human desires. While Cornucopians pictured the economy as the engine of the endless growth of wants, Finitarians asked, what about simplicity? A meaningful life? Liberation from desire? And by the way, what about living in balance with nature?

The authors note that Finitarianism was the dominant worldview of sixteenth-century Neo-Aristotelians, a perspective that later found expression in a variety of movements, such as Romanticism. When they thought about the economy and nature, Romantics tended to emphasize living within the limits of nature as the foundation of a healthy society. They saw the Cornucopian focus on ever-rising material standards of living as missing much of what makes human life worth the journey: community, artistic expression, imagination, spirituality, and work that is not soul-crushing.

Consider the views of art critic and political economist John Ruskin, who advocated the regulation of economic development for the protection of the environment and public health. Jonsson and Wennerlind note that during the 1870s, Ruskin began to notice sinister effects of industrial capitalism in the smoke-filled skies of his country home in England’s Lake District. Unlike most of his contemporaries, he saw the potentially global reach and catastrophic dimensions of what was billowing out of factories Romantic William Blake had earlier dubbed the “dark Satanic mills.” In a series of published letters addressed to British workers, Fors Clavigera, Ruskin warned: “You can vitiate the air by your manner of life… You might easily vitiate it so as to bring such a pestilence on the globe as would end all of you.”

Talk about prescient.

Jonsson and Wennerlind’s book describes several strands of resistance to cornucopianism, from Thomas More’s Utopia to recent challenges from ecological, feminist, and anarchist thinkers.

What the world needs right now, argue the authors, is more Finitarianism. Instead of charging ahead with exploiting nature and expanding our wants, we need to repair the harm we’ve done and work to prevent further damage.

The authors point to a few economists who have begun to recognize the threat economic growth poses to the planet and the role that economics has played in driving an unsustainable approach to natural resources – but it’s a pretty short list. Their history of Finitarian movements offers blueprints for new ways of considering the economy and nature.

For current inspiration, Jonsson and Wennerlind cite the Planetary Boundaries model as a useful framework for allowing humans to thrive without exploiting and destroying nature, part of a movement to rethink the purpose of the economy. They also point to Earth System science – the interdisciplinary study of the interconnected parts of the environment — as a promising tool for recognizing how the ideologies of maximum efficiency, infinite substitutability, and infinite growth threaten the intricate processes that make the planet inhabitable.

Despite these promising signs, the authors point out that neoclassical economists still hold onto a belief in human mastery of nature that turns a blind eye to the planetary crisis.

Bottom line: Scarcity warns that if we stay bent on harnessing nature to fulfill our limitless desires, those desires won’t matter much because in the end we’ll destroy ourselves, and a lot of the natural world, too. Our ignorance of nature’s complexities, plus the continuation of harmful economic ideologies, threaten the stable functioning of Earth, but with Finitarian approaches, Jonsson and Wennerlind are hopeful that we can envision a future beyond the endless multiplying of our material wants and enter a collaborative partnership with nature.

The good news: although the authors acknowledge that the conflict between Cornucopians and Finitarians is still playing out, they write that “the planet itself now seems to weigh in on the side of the Finitarians.” Is that enough to convince mainstream economists?

Meanwhile, smoke from Canada’s wildfires has drifted down into the southern United States and as far away as Europe, covering millions in toxic haze. There is little doubt that human carelessness is a major cause of the phenomenon and that until humans can change course, we’d better get used to it.

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  1. Henry Moon Pie

    It’s astonishing that Parramore never mentions The LImits to Growth, the preeminent modern example of Finitarian thinking. For an excellent oral history of how economists have reacted to LtG from the time of its publication until now, there’s an excellent podcast with many recorded quotes from the Meadowses and other participants. Spoiler alert: mainstream economists have attacked and tried to suppress LtG from the beginning.

    For how Kate Raworth integrates the 9 planetary boundaries, here’s a nice summary.

    Economists are a curse.

    1. southern appalachian

      Thanks for the links, appreciate the podcast in particular. Often wonder what happened there in Massachusetts, how do you go from a Donella Meadows to a Larry Summers?

      1. GramSci

        Harvard/MIT was always embarrassed by FDR, but they couldn’t immediately disown him after he had been eledted president for 16 years (though he was assassinated after only 12 and 1/4. It took a few years to purge Massachusetts of all civility.

    2. Indus

      For those who are interested in LtG related books, following are good IMHO

      1. Bardi, Ugo (2011). The Limits to Growth Revisited. Springer Briefs in Energy

      2. Bardi, Ugo; Alvarez Pereira, Carlos, eds. (2022). Limits and Beyond: 50 Years on from The Limits to Growth, what Did We Learn and What’s Next?.

      related ( also a free book )

      3. Energy and Human Ambitions on a Finite Planet Murphy, Thomas W, Jr

    3. bill wolfe

      “Small Is Beautiful” (Schumacher) and “The Closing Circle” (Commoner) and the work of Georgescu-Roegen, Herman Daly, and Murray Bookchin were all classics I read back in the day.

  2. Rolf

    … what makes human life worth the journey: community, artistic expression, imagination, spirituality, and work that is not soul-crushing.

    My thanks to Yves for including this review: Parramore’s words couldn’t have been better chosen to underscore what is truly valuable in life.

  3. Jeremy Grimm

    First thoughts: This post tacitly assumes that Cornucopian or Finitarian models the range of possibilities for Humankind’s relations with Nature. Though I suppose it might be shoehorned into a Finitarian model — taking the book “1491” on its face, I regard the approach American Indians [I have no idea what ‘woke’ term I should use] applied to controlling Nature as a middle path. They controlled Nature by managing Nature in a way that satisfied the needs of their way of life. Of course part of this approach to Nature means also asserting some control over their own Nature through the way of life they chose. From my first access to “The Dawn of Everything: A New History of Humanity” — a book that deserves many readings — this middle path provided for a fulfilling and satisfying way of life, claims that cannot be made about Humankind’s way of life under Neoliberalism.

    Present day economic theories have rationalized efforts to destroy and exhaust Natural resources in the same manner that those economic theories have destroyed the Empire’s industrial economy, and way of life — for all but a very very few. Rather than identify the concept of “economic concept of scarcity ” as the culprit, as does this post, I believe the economic concept of pareto-optimality is the culprit. How else could anyone seriously claim that our present way of life is a maximum of efficiency that somehow results in a most fulfilling and satisfying way of life for Humankind.

    My judgment about present day Western economics and economists is far less forgiving than that I read into this post. I view them as toadies to an oligarchy of rapacious moral and spiritual cretins exercising a very short view of the future.

    1. John R Moffett

      I believe a hybrid system that uses the overall management strategy of Native Americans combined with local production based on sustainable agriculture with a minor dose of highly regulated capitalism might work. However, the capitalism would have to be founded in morality and ethics, rather than on profit. The mindset for capitalism would have to be completely replaced, where doing what is right far outweighs making a buck.

    2. Carla

      @ Jeremy Grimm — For “American Indians” may I suggest “indigenous peoples of the Americas” ? (or just “indigenous Americans” for short.) And thank you for a most thoughtful comment overall.

      On this general subject, I recommend Jason Hickel’s “Less Is More: How Degrowth Will Save the World” for clarity, brevity and accessibility to the average reader. Hickel calls himself an economic anthropologist and states up front: “This is not a book about doom. It is a book about hope.” And I certainly found that to be true. Hickel has been criticized for emphasizing degrowth, which so many people seem to find a terrifying prospect. But if degrowth is what our circumstances demand, then I find euphemisms cowardly and counter-productive. After all, we have another two-syllable word for unlimited growth: cancer.

  4. KLG

    Both authors are historians! Even though one if them is at Chicago ;-) this has possibilities! Other indicators from the Amazon preview: Mill appears in the index and was the first(?) to write about the steady-state economy. No “steady-state” but “stationary state” is present. The worry is that people naturally view “stationary” as “stagnant” and not appreciate that development is possible without “growth.” No Herman Daly, who was the first modern economist to place the economy inside the ecosphere, in the index. Someone named “Karen Raworth” is on p. 15. Anyway, our only hope is to reduce throughput and learn finally that growth, “sustainable” or otherwise, on a finite planet is impossible. Good luck with that when economists care only about “growth,” now and forever. Jeremy Grimm is exactly on point here, as usual. The empty WalMart shelf on the dust jacket? Meh. That misses the point. Look forward to reading this one, though!

  5. Susan the other

    Finitarian is a better definition by far than Romantic. Maybe this perspective was called “romantic” because it was too precious to sacrifice human well-being for nature’s well being. Devastating the natural environment has always been as horrendous a crime as murder and war. The tragedy of war is never suffered as overweening romanticism – the tragedy of war is triumphant nonsense, win or lose. Very nutty alchemy. Also very expensive, eating up the planet’s resources so we can have one last nuclear showdown? We might actually be able to get down to serious business with a “collaborative partnership” with Nature if we got rid of our primary delusion. Peace and Stability sounds feasible.

  6. Karl

    Let’s remember the ecological Impact equation: Impact = Population x Consumption per capita x Technology. All of these variables are a function of one-another with many lags and feedbacks. But the precursor and driver of all is population. I see nothing in this discussion of “boundaries”, or in many other “Limits to Growth” discussions, of the root cause–a seemingly taboo subject–namely, the cancerous growth of humans on the planet (the original LtG report did highlight this). Even the latest IPCC report’s chapter on climate induced migration doesn’t mention that mass migrations will happen anyway due to over population, regardless of actual climate trends. That chapter seemed to talk about everything but population.

    When you look at certain regions, e.g. Africa, you are seeing what Paul Ehrlich referred to as a population bomb exploding in plain sight. The Horn of Africa is already in severe overshoot in relation to sustainable food production. India looks like it will be next. Modi, in his recent address to our Congress, touted India’s very youthful population, and high population growth, as a great thing for the global economy and got a standing ovation. When India’s 0-5 year cohort reaches maturity (its largest by far yet), where will the food come from to feed them all?

    We are now at 8+ billion, and won’t peak until mid-century at 11+ billion, unless humanity reaches resource limits before then. Think about that.

    We ignore Malthus at our peril.

  7. Earl Erland

    There’s a thread in Rouge Heroes that results in Paddy Mayne training what Sterling is told by his Algerian Lover/Second in Command of French Intelligence in Cairo of the 20 best Chasseurs the French have to offer. Sterling gives in. The Poet examines le Vignt and finds three who speak German; two are Allegmaine, both speak French. The third who speaks German and French s a Jewish Pole who knew his wife and two children went to HitlerWorld. He calls himself a hand grenade: pull my pin and throw me in the middle of Nazis. I am your hand Gre-naid. The Poet immediately identifies the two Germans as tweedle Dee and tweedle Deutsch. It’s half accurate and as fleeting as any Judgement. Also, the friend of this place who calls cinema the last great invention, describes modern film as childish, telling the same story over and over, what a read! There are several versions of films titled “Once upon a Time in the West”. I don’t even think it was Tarantino’s best Western. Nor do I think the Aneid is the last travel story. Does Aur friend look back, and recent, and forward, if there is a way. Because curating is difficult, on both sides of the screen.

  8. les online

    Dont worry. Be happy !
    The World Economic Forum (WEF) is already on the job…
    The lynchpin of the New Religion the WEF promotes is “Own Nothing. Be happy,”
    Soon we’ll be encouraged to hunt down the Acquisitives within the lower classes, and Shame them…(While dis-possessing them)…
    There was an interest in Steady State Economics during the 1970s…It went Nowhere…
    Australia. 1970s, began offshoring industries to low-wage countries…It was embraced by the
    lower classes with the promise of Cheaper imported consumer products…
    Cheaper is just as central to ‘economics’ as is Scarcity, but gets no attention…
    Driving costs down is a full-time job, an obsession…
    Two drivers of capitalism’s emotional economy: Enough is never enough; and
    taking more than you give (unequal exchange) – is the road to Success…

  9. Bruno

    In today’s Grauniad (9 july) Larry Elliott wrote:
    “In truth, the real fantasists are those who cling to the belief that we can continue to exploit the natural world to satisfy our desires. If that’s what economics is about, we badly need a new economics.”
    Well said!

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