Alternative economics (Last of three parts)

John McMurtry author of The Cancer Stage of Capitalism resents over the “Methodological Censorship in the Academy” in which economic orthodoxy is preserved and held unchallenged. Here he cites the seeming immutability of the pervading structure being “understood as without alternative.” 

Sharing the same unrest with heterodox economists who portend the forthcoming crisis on the environment, McMurtry offers his own prognosis of orthodoxy, along with its growth-oriented creed, to the biophysical carrying capacity and reproductive diversity of our natural capital which he likens it to a degenerative disease like cancer . “At this stage of the global market system’s reproduction of transnational money sequences to unheard-of volumes and velocities of transaction and growth, a systematic and irreversible destruction of planetary life organization emerges for the first time in history.”

While McMurtry offers to confront economic orthodoxy through the power or insistence of the “civil commons” (i.e., through personal, collective or institutional form which protects and enables the access of all members of a community to basic life goods), ecological economics (EE) and steady state economics (SSE) provide a clear framework for rationalizing the utilization of our natural wealth. In a nutshell, civil commons, in my opinion, provides only the social or political structure for which populations must assert to “depathologize” the disease through collective will.  

EE and SSE, on the other hand, differentiate themselves as tools to guide the mode of production according to the natural capacity of the environment. Central to EE's belief is that there are limits to the growth in real income simply because nature is also limited. The goal is to educate societies to recognize that their respective economies are merely parts of larger natural ecosystems and that the population must co-evolve within those natural systems. Thus, following the laws of thermodynamics entropy must be minimized. Resting upon the view of EE, SSE refines the idea rather more conservatively or drastically the issue of sustainability based on a stable population and consumption. SSE advances that a “no growth system” is the surest way to keep the human population alive for all it can. 

EE and SSE have yet to evolve from theory to practice. However, the rising adherence to these alternative views did not only produce serious scholarly interest at the level of academe, more and more institutes have been established to devote their efforts to provide the mechanics to their implementation as well as organizing interest groups to advance the idea at the level of policy making. For want of empirical evidence or existing models, critics may dismiss them as among the “pie in the sky” theories. But isn't it worth noting that orthodoxy has also failed empirically as a model? 

“Ecological economists have offered empirical evidence that growth is already uneconomic in high consumption countries. In other words, the quantitative expansion of the economic subsystem increases environmental and social costs faster than production benefits, making us poorer not richer,” says Herman E. Daly of the School of Public Policy University of Maryland. Either in throughput or GDP, the growth system hasn't demonstrated the growth it envisions for the societies that adopt and support the idea. Simply stated, a growth driven economy is failing. 

But how do we deal with poverty in an EE or SSE system? Daly proposes “redistribution—by limits to the range of permissible inequality, by a minimum income and a maximum income.” By defining the right range of inequality, it thereby, restricts economic growth. After all it is not the goal or thrust of both systems to accumulate aggregate growth. And since growth no longer come as an objective Daly further adds, “We no longer need to spend billions on advertising. Instead of treating advertising as a tax-deductible cost of production we should tax it heavily as a public nuisance. If economists really believe that the consumer is sovereign then she should be obeyed rather than manipulated, cajoled, badgered, and lied to.”   

Finally, in this era of “high-scale, high velocity” production, we are left with a very difficult choice as to whether or not to keep the business growing for the sake of wealth or abandon the idea of growth for the sake of the environment's health. The offered alternatives cannot be assumed as panacea neither the application thereof will bring immediate economic relief to an ailing population as soon they embark on these alternatives. These alternatives should serve to evoke our rational senses that a growth-oriented economy cannot be relied for the long term to ensure the survival of populations much less even provide the short term relief of poorer economies.

(Erratum: The previous column inadvertently states "Although these industries undoubtedly generate jobs but they come without risks..." It should have been stated: Although these industries undoubtedly generate jobs, but they do not come without risks. Our apologies.)