It is a curious thing that our politicians and economists in the Uniparty believe that economic growth, now and forevermore, will solve all our problems and cure all our ills. One looks around and it’s clear this is not so. Still, this economics truth was stated with utmost, if utterly spurious, clarity by a former member of the highest establishment at Harvard, the World Bank, the White House of Barack Obama, and Harvard again, among other perches:
There…are no limits to the carrying capacity of the earth that are likely to bind any time in the foreseeable future. There isn’t risk of apocalypse due to global warming or anything else. The idea that we should put limits on growth because of some natural limit, is a profound error.
- Lawrence Summers, chief economist of the World Bank, 1992
Thus begins The Invention of Invention of Infinite Growth: How Economists Came to believe a Dangerous Delusion by Christopher F. Jones of Arizona State University. For economists, “the pursuit of infinite growth is the key to a better future.” But for the world, not so much:
The pursuit of infinite growth is also the single greatest threat to human sustainability. In the frantic quest to increase output and acquire more goods, people across the globe are emitting vast quantities of greenhouse gases, leaching toxic materials, cutting down rain forests and pushing countless species to extinction. Despite advances in efficiency, the ever increasing scale of economic activity continues to accelerate climate change, biodiversity loss, ocean acidification, and soil erosion. The planet’s relatively stable ecosystems of the last several millennia are changing more radically than ever before.
What is often forgotten is that growth was not an especially important desideratum of the classical political economy of Adam Smith, David Ricardo, Thomas Robert Malthus. They took a broader view of economic life that included the natural world. Their Physiocrat brethren are often ridiculed but Pierre Samuel du Pont de Nemours (father of Éleuthère Irénée du Pont de Nemours) was correct when he wrote in 1764, “Agriculture is the only human labor with which the sky cooperates without ceasing and which is a perpetual creation.” This inchoate understanding of thermodynamics (i.e., the earth is finite in material but not a closed energetic system while the sun shines) led him to state “we strictly owe the net product to the soil, to providence, and to the beneficence of the creator, to his rain that beats down and changes it to gold.”
The Physiocrats had a vested interest in their view of a steady-state economy ruled by nature as much as humans, but that did not make them wrong. They also understood that the Earth could be abused. Smith, Malthus, and Ricardo viewed the steady state as an unfortunate inevitability. By the middle of the nineteenth century, John Stuart Mill viewed the steady state as a necessary result of the material limits of planet Earth – air, land, and sea – but expected that this change would lead to a better future that included broadly based human flourishing. This ended abruptly with the codification of neoclassical economics under the influence of Alfred Marshall with his The Principles of Economics in 1890:
To its defenders, the neoclassical approach had much to offer. The calculation of individual utility maximization and demand curves lent itself to a mathematical approach that appeared objective, just like the natural sciences which were widely hailed as the leading edge of knowledge. It also offered an effective repudiation of…the labor theory of value…Marginal analysis, on the other hand, seemed to show that in a world of perfect markets workers and capitalists received their fair shares.
…
By assuming that rational actors maximized their utility in open markets with full information, it emphasized different questions that the classical political economists asked or those who would follow in the historical and institutional schools. In classical political economy, the central questions focused on the distribution of wealth and resources between the three major social groups: capitalists, landowners, and workers. Investigating such questions often brought up discussions of justice and fairness.
On the other hand, neoclassical economics shifted the gaze to the “all-knowing and ever-rational Homo economicus” [1] and his (women and children were ignored) utility-maximizing self who always operates with completely symmetric information shared by buyer and seller in a perfectly free and transparent market. These markets are, of course, imaginary constructs and Homo economicus is the ultra-rational but not sapient species who is as real as Piltdown Man. Many disciplines have physics envy. Economics has it worse than most. But economics is and always will be a subdiscipline of history, sociology, psychology, anthropology, the natural sciences, and engineering. The exclusion of the natural world from neoclassical economics was a break from the past more than it created a useful future. Thorstein Veblen and the largely forgotten Richard Ely were correct in putting economics in its proper place, but very few listened and those who did lacked political and institutional power and agency.
The middle section of Before the Invention of the Infinite describes the appearance of “Growth” exceedingly well. The Great Depression led to the description and measurement of “national income” based on the work of Simon Kuznets, who nevertheless noted that national income was not a particularly useful number if it ignored the distribution of wealth and income. Analysis of the factors of production during World War II led to the concepts of Gross National Product (GNP) and Gross Domestic Product (GDP). We remain in the thrall of GNP/GDP, but the most important word here is “gross.” It is the measure of something large and because it can be measured it is important. But it tells very little of what is in the gross. National income, whatever it is called, has never been a measure of social welfare. Kuznets taught that “the welfare of a nation can, therefore, scarcely be inferred from a measurement of national income…The human mind (had a tendency) to simplify a complex situation in a compact characterization (in ways that were) dangerous (and subject to) abuse.” As summarized, Kuznets:
Harbored deep concerns about the continued use of GNP in peacetime. The switch from income to production…confused means with ends. The production of goods was a means to a better life for people, but not an end unto itself. Income came much closer to capturing what mattered to people: their ability to purchase goods and services. Focusing on production foregrounded an abstract entity over human needs. But Kuznets’s voice would soon be drowned out by a nation – and a world – that quickly became addicted to GNP.
But not everyone. President Eisenhower in the 1950s “never jumped on the growth bandwagon.” Rather, he emphasized stability and full employment instead of an ever-expanding GNP, even if stability and full employment remained aspirational and out of reach for many in society. Nevertheless, measurement of the economy and an obsession with growth took pride of place in the skein of academic economics, with Robert Solow of MIT being the most influential practitioner. As the theorist of growth, Solow had no equals, and the mathematization of growth was a fertile field. But growth theory also left out, among other things, competition between industrialists and the “creative destruction” of Joseph Schumpeter – how creative the destruction depends on which end of the destruction someone stands. What Growth Theory completely ignored is what made growth possible in the first place, planet Earth:
Yet within this attention to growth and its factors, there was a notable omission: the natural world. Bright young economists directed their energy to multi-sector models, optimal growth theory, and learning by doing, but gave hardly a second thought to what role natural resources played in stimulating growth or how the consequences of booming economies might influence the habitability of the planet. The amount of capital a society had to invest in new machinery, might limit growth, but not terrestrial endowments.
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Solow excluded the natural world from the beginning with his 1956 article (“A contribution to the theory of economic growth,” Quarterly Journal of Economics 70: 65-94): “Output is produced with the help of two factors of production, capital and labor,” he wrote, thereby reducing the three classical factors of production – land, labor, and capital – into two. He was not alone in doing this. (italics in original)
In hindsight it is difficult to see how this could have been taken seriously, except perhaps in a world that had just suffered through the Great Depression and World War II and was comparatively empty for that. But that is no excuse. “Growth without Nature” became the default assumption of late neoclassical economics after WWII. In the 1950s, the thinktank Resources for the Future began its work (RFF, the author’s “thinktank no one has ever heard of” is still in business). It was staffed by economists from the beginning and this was essential, because as argued by Harold Barnett and Chandler Morse in the RFF product Scarcity and Growth, “the pronouncements of limits by conservationists were consistently “mistaken” and “inappropriate” because their analysis “was without comprehension, or even recognition, of the relevance of economic principles or facts.” According to RFF, “Human ingenuity and science were ‘turning the tables on nature, making her subservient to man.” Okay, then:
Moreover, scientific breakthroughs appeared poised to deliver humanity new power to control the natural world. The splitting of the atom suggested the possibility of power too cheap to meter, and advances in chemical engineering gave the tantalizing allure that materials could be manipulated at the molecular level to create new products.
This brings us closer to a present that is beginning to appreciate that the economy is a subset of the natural world and the ecosphere rather than the other way around. The classical economists of the eighteenth and nineteenth centuries (Malthus, Smith, Ricardo, Mill, Marx) understood this, but the knowledge was lost in transformation. Beginning with Kenneth Boulding and lesser known but essential political economists including Nicholas Georgescu-Roegen and his student Herman Daly, the place of the economy within the world has been recognized but still struggles to take hold.
Georgescu-Roegen spent the first half of his academic career as a neoclassical economist and the second half describing its flaws. In his The Entropy Law and the Economic Process (1971) [2] he showed conclusively that the economic process cannot be abstracted from the natural world:
He took central aim at the faith his fellow economists placed in the power of price signals and the infinite potential of technological progress, arguing that these were fanciful pronouncements based on a false belief that the economy existed separately from the natural world. He railed against “the myth that the economic process is a circular merry-go-round which cannot possibly affect the environment…he noted the considerable irony that economists were the most vociferous critics of The Limits to Growth report considering their own fetishization of abstract models, like Solow’s, which often did not include price as an explicit category. He thus concluded: “one gets the impression that critics from the economics profession proceeded from the Latin adage – quod licet Jovi non licit bovi – what is permitted to Zeus is not permitted to a bovine.” [3]
Georgescu-Roegen’s work has been extended and made less abstruse by Herman Daly, for example in Beyond Growth (1996, pb 1997). We discussed Herman Daly as the economist for our time three years ago. Remember that he famously argued (and lost at the time) with Lawrence Summers at the World Bank about a diagram in a report that had the economy as a subset of the Earth. Summers insisted “that’s not the way to look at it.” Actually, Larry, yes it is. The primary point of the inclusion of thermodynamics in economics is that in this corner of the universe, when our low entropy (i.e., high energy) stocks are used up, they are gone forever on a biological/human timescale. Otherwise, it would be possible to burn the ashes left in a fireplace and produce heat once again
Daly was no sentimentalist, and the Second Law offers no reprieve. He was correct that the only way to proceed intelligently is to reduce throughput in the economy and be as regenerative as possible in agriculture, while using the essentially unlimited energy from the sun as much as possible. This is where human intelligence and ingenuity enter the picture, not as a replacement or substitution for the actual stuff of life but as the means to use our natural world with care and grace, by managing forests and fields, lakes and rivers and the seas, so they are regenerated while the sun shines rather than be destroyed as they are used up.
Thus, a legitimate ecological economics will be necessary if we are to back out of the crack in which we find ourselves. On the other hand, when considering limits to growth:
Solow and Joseph Stiglitz “theorized that as long as human and financial capital grew, they could substitute for natural capital. In this weak sustainability, what mattered was that future generations were left with sufficient capital to meet their needs, not a set amount of each type. For Daly, this was the equivalent of offering “a recipe for making a cake with only a cook and his kitchen (or, labor and capital without the land). We do not need flour, eggs, sugar, etc. nor electricity or natural gas, nor even firewood. If we want a bigger cake, the cook simply stirs faster in a bigger bowl and cooks the empty bowl in a bigger oven that somehow heats itself.” Daly’s view of strong sustainability held that certain amounts of natural capital remained necessary and could not be replaced by other forms of capital.
Solow replied that although the entropy law may (sic) be true, it was “of no immediate practical importance for modeling what is, after all, a brief instant of time in a small corner of the universe.” True, human civilization on planet Earth has existed for about 0.000071% of the 13.8 billion years of the universe, but this is our only small corner of the universe for the duration of the human species. Stiglitz agreed with Daly that environmental concerns “are of concern” but maintained that substitution would mask shortages for the foreseeable future. This is conventional economic reasoning at its best.
The so-called “environmental economics” exemplified by the RFF is thoroughly neoclassical and neoliberal, meaning that Earth remains little more than an instrument for human use and abuse. While ecological economics has had scant significant institutional impact, so far, the successors of Julian Simon have thrived. Simon wrote The Ultimate Resource (1981, 1996). Both were bracing in their “optimism” and Number 2 is still in print, although pricey, from the publisher. Simon’s overarching thesis is that the ultimate resource is the human imagination rather than the conventional resources that humans use to make things (e.g., rare earth elements, which are much in discussion today). Given a problem, humans can solve it! And the more humans on planet Earth the better, because we are the ultimate resource.
In the 1980s, economists “doubled down on the idea that infinite growth was both possible and desirable.” This has been the basic thrust of endogenous growth theory of Paul Romer and Robert Lucas, in which they “almost completely rejected diminishing marginal returns or physical limits to growth”:
Expansion came from the human mind – from people getting smarter, inventing new things, and working more efficiently. Though more technical and less polemical than Simon, Romer and Lucas’s research came to similar conclusions: there were no natural limits to growth. And even as scientists began to document with greater certainty the dangers of climate change, economists such as William Nordhaus argued against taking aggressive action and saw little reason to reconsider the discipline’s core assumptions. Doing nothing to abate greenhouse gas emissions might be bad, they granted, but overreacting to the problem could be even worse. Growth’s benefits were too important to sacrifice for climate stability.
Nordhaus’s model of the effects of anthropogenic global warming later assumed that “because 87 percent of work in industrial nations takes place (in the air conditioned) indoors, it will see no economic impact from climate change.” The nature of work is a subject of its own, covered here before, but this could have been written only by someone who has never worked for a living, using the physical definition of work as moving mass from one place to another, especially outside in the weather. This entire theoretical construct ignores the broader effects of global warming, including decreases in primary plant productivity with increasing temperature, ocean acidification (goodbye, mollusks as your shells dissolve), extinction (and not just other animals and plants), and sea level rise. The list is long. And it’s beginnings go back at least to the English polymath Charles Babbage who wrote in 1835 regarding the burning of fossil fuels at the beginning of the age of Fossil Capital:
The chemical changes which take place are constantly increasing the atmosphere by large quantities of carbonic acid [i.e., carbon dioxide] and other gases noxious to animal life. The means by which nature decomposes these elements, or reconverts them into solid form, are not sufficiently known. (quoted from Fossil Capital by Andreas Malm, 2016)
When choosing their scientific model, economists in the nineteenth century picked the wrong science to emulate, although to be fair ecology had not been invented yet. However, twentieth-century economists did not have that excuse. Moreover, their models also overstate the benefits of growth while assuming as a matter of course it is an obvious benefit for society. There are very few data supporting this assumption, especially when growth takes no heed of distribution of income and wealth, as described by Richard Wilkinson and Kate Pickett. As things continue to fall apart the only path likely to save us and the natural world as we know it will be a steady-state economy in which the Index of Sustainable Economic Welfare devised by Herman Daly and John B. Cobb, Jr. supplants GDP as the measure of economic wellbeing. John Stuart Mill understood this in the middle of the nineteenth century. Herman Daly and others have shown the way. All we have to do is pay attention and never forget that the economy exists within the ecosphere instead of apart from it. Contrary to what Larry Summers told Herman Daly thirty-something years ago at the World Bank, this is the way to look at it! Besides, as Cactus Ed Abbey put it so well in his collection of essays The Journey Home, “Growth for the sake of growth is the ideology of the cancer cell.”
One final note, The Invention of Infinite Growth is the source for understanding the development of modern economics and the rise of the economist as the arbiter of what is true and good in this modern world. In this it is a worthy successor to The Eighth Day of Creation by Horace Freeland Judson, in which he told the story of the rise of modern molecular biology that inevitably became the explanatory paradigm of virtually all of biology and medicine. When I taught and directed graduate students in molecular cell biology, I implored my students to read The Eighth Day of Creation if they really wanted to understand what they were doing. A few did. Scientific knowledge is useless to a scientist who doesn’t understand at the deepest level the larger theoretical and experimental foundations upon which her work stands. I doubt The Invention of Infinite Growth will be read by too many budding economists, but it should be. Like Horace Freeland Judson, Christopher Jones is very good at explaining who did what, how and why they did it, what they were thinking, and what their results meant to the larger world.
Most highly recommended.
Notes
[1] Perhaps this is trivial, but the biologist in me must correct the species name to Homo economicus, not homo economicus as written by the author and many others including the irreplaceable Wendy Brown in Undoing the Demos.
[2] Difficult in places but worth the trouble. Georgescu-Roegen’s work has been extended and made less abstruse by Herman Daly in more accessible form, for example in Beyond Growth (1996, pb 1997).
[3] This could be applied to far too many of my scientific colleagues, as we have discussed at length here before.
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Excellent (and sadly somewhat depressing) article. I was unaware of this book, which seems to be very good and absolutely relevant, and I’ll take a look ASAP. We’ve come to a point in which either economics starts taking into account natural and material cycles, or becomes simply an irrelevant historical footnote. Who nowadays remembers the highly sophisticated philosophy of the Scholastics? Their world is gone, and so is the perceived relevance of their thoughts (though I suspect the Schoolmen fared much better than economists will). I am often badly impressed by how much economists don’t realize that their line of work is not at all eternal, much as the world isn’t. Though I also expect no changes, certainly not from orthodoxy; what will come together with the ruins of the current world will be most likely something altogether new.
Very interesting, KLG, and thanks for your work.
I’m left wondering about the role of the distinction between use value and exchange value in this, which seems to flit around in the background without ever emerging. Capitalism orients to the creation and infinite accumulation of exchange value, and this would seem to encourage infinite growth aspirations. The relationship between exchange and use value, with the latter’s tilt towards the finite material world, has always been tenuous, and has been getting increasingly dodgy in this era of desperate market support by central banks and financial instrument concoction. Couldn’t this be a “real world” nexus of the ideological trends this article so well draws out?
Lots to chew over in this post. Larry Summers can be ignored as it seems to be his job to tell the elites what they want to hear but even Wall Street does not believe in infinite growth, hence the saying that trees do not grow up to the sky. Going out on a limb here to say that it is not so much this idea of infinite growth being a reality, but that this idea is firmly bolted onto another idea – progress. As a kid you would see docos and clips talking about how man was conquering nature as it was our birthright. The arrogance of this idea jarred me, even back then. But I would say that the ideas of growth and progress move in tandem and sometimes mean the same thing. And if the wheels come off our projects, people will say that somebody will think of something or more technology will save us. Best example of growth is space where billionaires want to put up satellites and one wants to launch a million of them. It cannot be stopped because you are talking about growth/progress but what happens when natural limits induce a Keppler Effect and we lose access to space for the next coupla centuries? This planet is running out of resources so that billionaires can be even more wealthy and for no other reason.
It´s all very well folks about limits to growth, but I’d like to draw attention to an unspoken reality, I mean population growth. It continues to grow albeit at a smaller rate, nevertheless very impressive in itself and consequences. That also means that the need for even more energy, more food, more room, more gadgets, clothing, transports whatsoever will go on escalating. Then what to do? How to understand that no economists, no degrowth theory deals with it? It´s uneasy, yes it is. The truth is that some 20 billion won’t be able to survive. Something will have to be done. Don’t know what.
Great stuff that I predict will stimulate another one of those memorable NC discussions, KLG. As a degrowther, I’m happy to see such an excellent overview of the perils of growth. Your essay brought to mind Edward “Teddy” Goldsmith’s The Way: an ecological world view, and I managed to find a Goldsmith online essay, “The Religion of a Stable Society” (1977), that discussed some of the ideas relevant to your essay. What follows is largely found in that essay.
The modern obsession with growth and its primary driver, technological “progress,” runs completely counter to the preeminent goal of living systems to maintain stability both internally and externally. At the cellular level, the cell seeks to maintain the stability of its internal functions, but it must also interact with the other cells in the same organism so as to preserve the stability of the larger system. A cancer cell is an example of what happens when a component part of a system ignores the welfare of the whole.
Cybernetics has helped us understand that a system needs a control mechanism to maintain those two types of stability. The control system must collect feedback data from the relevant systems and use it to regulate behavior in such a way as to preserve stability. At the cellular level, this function is performed largely by genes. For complex animals, it’s the most basic parts of the animal’s brain. For societies, it’s the predominant societal worldview that serves this function.
At the societal level, this cybernetic function has three goals:
1) the maintenance of society’s basic structure;
2) prevention of changes to the surrounding environment which are beyond the limits of the society’s ability to adapt; and
3) the ensuring continuity of society in relationship to its environment.
Goldsmith then briefly considers whether either the waning Christianity of his time or industrial society’s new religion of science, technology, progress and growth were capable of serving the cybernetic function outlined above based on their performance to date, and Goldsmith finds them severely wanting. Their insufficiency is even more obvious nearly 50 years later.
The rest of the essay is devoted to an examination, based on anthropological findings, of traditional religions and how they differ from the dominant modern worldview that is driving us to destruction. The comparison focuses on how traditional religions handle what seems to be a human need for “prestige.” In a hunter-gatherer band under the Dunbar number, this need is met rather easily. The size of the group means that tasks are highly differentiated and everyone is required to fulfill her/his task successfully for the band to succeed. “I am because we are” is self-evident. (Nate Hagens makes a similar observation in his excellent video essay: “Humanity as Dr. Jekyll & Mr. Hyde: The Symptoms, Patterns, and Drivers.”)
Beyond the Dunbar number, things get considerably more complicated. The personal impetus to acquire prestige can lead to the appearance of Dark Triad traits, hierarchy and a radical loss of stability, both of the social group and of the group’s relationship to the surrounding ecosystem. Goldsmith argues that religion (definitely NOT monotheism) is the cybernetic control mechanism that is required to channel the quest for prestige into behavior that benefits not the individual but society and the surrounding ecosystems.
I’ll end this with a quote from Goldsmith’s essay that encapsulates his argument:
Recommended:
Goldsmith, “The Religion of a Stable Society”
Goldsmith, “>The Way: an ecological worldview
Hagens, Humanity as Dr. Jekyll and Mr. Hyde
Thanks for the recommendations! Cybernetics has recently come to my attention and I’ve been finding quite strange how such an useful discipline has essentially been forgotten (well, it was stripped for parts and dismantled: the concept of feedback is useful everywhere, after all). Maybe a lot of our problems are methodological in nature.
Thank you so very much, an important post and concept. There is the earth and the sun, life on earth depends on the sun. That is what we have and we must take care of what we have. Do not increase the earth’s heat absorption from the sun, do not recklessly use up non renewable resources on the earth. Earlier people (and some still do) understood this.
I try to do my tiny part, but the further we go the darker our prospects seem.
I must add, there is no god to bail us out. We’re on our own.
Agh. Julian Simon – in the 90’s, he was the go to contrarian on high school speech/debate teams.
He did win a bet against Ehrlich on commodity prices for a set of resources, but most analysts would consider Simon lucky rather than correct. Other time frames or periods would have resulted in a different outcome.
Very interesting, thank you for the review. I’ll read the book. Seems like a required reading prior to Galbraith & Chen, Entropy Economics (https://press.uchicago.edu/ucp/books/book/chicago/E/bo239242610.html). The last two consider Arrow & Debreu, “On the existence of an Equilibrium for a Competitive Economy” (1954), central to Economy’s downfall. Curious to see if they are mentioned by Jones.
I wonder if Warwick Powell’s upcoming Thermoeconomics in a time of monsters will be more readable for someone like me without the maths to follow Chen’s alternative model for economics… And I’m not even sure to understand why a model is required.
Models of complex systems are required because they have too many moving parts to hold in mind at once, and the results of their interactions are often counter-intuitive.
We have to think systematically about systems or we will not understand them.
Agreed, but my uncertainty comes from the unresolved balance between their scope and power vs the unknown significance of the elements they discard and omit through the process of simplification and abstraction you refer to.
The bell tolls for growth.
I don’t intend this to be printed because I’ve been banned from commenting. However, you’ll be interested in the fact that for the last week, every time I try to reach your site I get the message: this site can’t be reached. So far, upon repeated tries I can still connect to NC.
You are not banned. You are moderated.
But thank you for telling us you are having issues. However, you are also the only person reporting that issue. When only one person is having difficulty, it just about always means that the problem is local. Have you tried quitting your browser and trying again?
A good moment to mention this entertaining classic from 2012 for anyone that hasn’t seen it yet:
https://dothemath.ucsd.edu/2012/04/economist-meets-physicist/
An account of what we’re told was a real conversation between a physicist and an economist at a dinner party, in which the physicist cordially but systematically punches holes in all the assumptions underlying the infinite growth model.
Thank you!
Speaking of alternative names for our species, ecological sociologist William Catton, author of Overshoot, came up with Homo colossus “—to reflect our gigantic per capita resource appetites and environmental impacts.” And Warren Hern, MD, MPH, PhD [epidemiology] suggests:
I obtained a used copy of Hern’s book by that title for a reduced price – it had evident water damage – it turned out to have been signed by the author, in Denver, with a dedication to a person then in the House of Representatives, now in the Senate, the junior Senator from Michigan. I don’t know if the book was ever in her possession. If I thought it had a reasonable chance to make a difference, I would send her a new copy. And yet, I don’t – I think Bill Rees is probably right – “We’re hooped.” I could be wrong.
Thank you for the post; this seems like an excellent read. I note that Jones is a historian, not an economist (which is a good thing!)
I wasted several years of my life in graduate school (sociology) trying to make sense of the ideas of “growth” and “productivity”, including tracing the evolution of both concepts in the economics discipline and in official government statistics. The TL;DR is that “growth” and “productivity” in academic economics and now in government statistics have come to mean something almost completely divorced from what any normal person would consider the meanings of those words, an outcome that was the result of a multi-pronged intellectual and class war with intellectual roots going back to Marshall and the early marginal economists but was really waged in the first 25-30 years of the post-WW2 period. (During WW2, it was still important to the war effort to maintain a sensible understanding of productivity as physical output per unit of work effort so that production of planes, ships and ammo could be maximized.)
It’s an interesting and infuriating story (one big moment was the decision to consider and measure finance as positive rather than negative economic activity) that I hope Jones and other younger scholars have the energy to trace and tell. My only beef with the post is the suggestion that Georgescu-Roegen, Daly or their modern decendents (and heterodox economists of all stripes) are part of any battle for the soul of economics. That war was lost long ago and there has been for decades a complete ideological agreement between economic conservatives (Friedman-ites, etc.) and economic liberals (Solow, Krugman, Stiglitz, etc.) that any “alternative” paradigms (such as based on common-sense facts about the world like tipping points, laws of thermodynamics, etc.) are ruled out from the get-go. There is a reason economists are paid 2-3 times what any other social scientists are! Not to say there aren’t a handful trying to fight the good fight, and all power to them, but there is no way economics is going to help us confront the future. The (measurable) fact is, we will continue to show growth in the economic data all the way up to, during, and after life as we (or our dependents) know it has ended, because it is baked into the methodology.
Thank you all for the discussion! A few replies from the road in appreciation…while I try to not think too much about what Yves provides to the community every morning since the last day of February. Our collective goal here is to start the discussion, not end it.
ocypode: I suspect the Scholastics will have had a more lasting impact than the neoclassical economists over the long term, provided there is a long term. “Irrelevant historical footnote” should describe these economists who are less scientific than your run of the mill phrenologist. But people, they do believe them.
hemeantwell: Use value is something we do not understand very well, as our “enemies,” each of them of our own creation, are demonstrating very well in Central Europe and the Near East.
Rev: I remember those documentaries, too. Shell Oil Company made some really impressive films that we watched often in elementary school. Technology to the rescue, whether we needed a rescue or not. But for me that was the Age of NASA before it became a bureaucracy in search of a budget after Mercury, Gemini, and Apollo. It was an exciting time!
Henry: Wow! Thank you for providing your usual unmatched wisdom and the reading list. All on my list now.
Alice X: The smallest of supporting parts matters. Which is why my much better half can see the tower of the building where she works from our front porch and my office is less than one mile from our house in the other direction. Our new friends asked us if we really wanted to live in the ‘hood. Why yes, where there are people on the street and the library and Post Office are across the street and a half-block away. With the drycleaner around the corner from the library and the best new restaurant in town three blocks away (with a bartender/therapist who makes the best margarita in town) and a serviceable restaurant/bar a block behind the Post Office. If only the planned inner city grocery store had worked out…
LY: I remember reading Simon Number 1 and thinking he had lost his mind. He did win the bet with Ehrlich and that is in the book. But Ehrlich has the better of the argument. Simon Number 2 was just as bad.
Htyul: The Galbraith fils and Chen book is on the list and thank you for reminding me. It will be interesting to see how they approach the problem. Galbraith is one of the good guys, and it is no accident he is not in an Economics Department. As Herman Daly was quoted in the book regarding his work after leaving the World Bank, the economists at Maryland had no use for him and vice versa. So he was in the School of Public Policy IIRC. Kenneth Arrow makes a brief appearance in the book.
ChrisPacific: That is a classic. I read it surrounded by a bunch of Trumpsters this evening while waiting for a takeout salad…if they only knew!
dave –just dave: Homo ecophagus is perfect and new to me. More stuff to read. Hern sounds great. Thank you for the heads up.
Left in Wisconsin: I almost went the Anthropology route, so I think I can understand…My teacher would have been fantastic, a noted historical anthropologist of the old school who introduced me to Jack Goody and Clifford Geertz and Evans-Pritchard. And Marvin Harris as counterpoint to Levi-Strauss. He did tell me I would have to read Talcott Parsons and that was a bit scary. He was also my first connection to Wendell Berry through a book review he wrote in a literary review. Both of those teachers are from Kentucky and both have lived exemplary lives. You are right about Daly’s influence, but I like to view him and Georgescu-Roegen and the real ecological economists as successors to Ignaz Semmelweis. He is now viewed as a brilliant clinician who stopped childbed fever in his hospital, but in his day he was considered a simpleton and he eventually had a breakdown and died a sad death. My closest colleague at work is a graduate of the Hungarian medical school named for Semmelweis.
Couldn’t have put it better myself! I will shamelessly steal this comparison, since I’m sure it’ll come in handy. And it’s not like the phrenologists didn’t have plenty of influence in their time; the question is how long do we have until the economic equivalent of phrenology finally gets seen for what it is? Or will we need an entirely new discipline altogether? (Perhaps rescuing the old “political” addendum to economy could be a good idea).
Thank you very much.
A recent overview of the current field in degrowth post growth economics is provided in Elena Hofferberth, “Post-growth economics as a guide for systemic change: Theoretical and methodological foundations”, Ecological Economics, Volume 230, April 2025, 108521.
However, the theoretical foundations she outlines are generic and far from the type of model properties detailed in Ch7 of Galbraith and Chen, a chapter titled “A biophysical theory of production in mathematical form”, which describes a theory that “can be applied to both biological and economic systems”.
I wonder what students of Crawford Stanley Holling’s biological theory would make of Galbraith and Chen’s (I’ve not seen reference to Holling in their book), to assess whether modelers coming from the two disciplines can agree.
I remember reading in David Harvey’s The Enigma of Capital back in 2009 that at 2.3% annual growth, the global economy would double by 2060 and then double again before the end of the century. Even with China and India growing like crazy, global GDP in the 90’s and 00’s didn’t grow all that quickly, and in the 2010’s it was absolutely anemic. The 2020’s haven’t been great, either. How do we expect the global economy to double twice in this century? At some point, China and India will slow down, and Africa isn’t going to be able to do it by itself. That means that growth rates will be less than 2-3% and will continue to slow down.
What will be the effects of this politically? Looking at the trajectory of things over the past two decades, I am pessimistic. The center will continue to collapse while the left and right grow. The structural forces provide a much stronger obstacle for the left to overcome than they do for the right. But hopefully we can figure it out as a species, not destroy the planet, and come up with a different form of social organization. Luxury space communism? I hope everyone else is thinking what I’m thinking.
Core concepts like “efficiency” need insistent attention. Neoclassical economics focuses on allocative efficiency often to the exclusion of thinking. Allocative efficiency does not subsume heat efficiency or technical efficiency in the control of production processes. The simple fact that wastes are inevitable by-products of all production processes needs to be foundational. Georgescu-Roegen championed “x-efficiency” but made little impression on the mainstream’s conceptions. Solow gained fame from an indefensible use of an aggregate “production function” — all allocative efficiency all day.