海角大神

Market bubbles occur when goods are traded at prices that greatly exceed real value. They burst when they grow so bloated that they become unstable. The current economic turmoil, widely viewed as the worst since 1929, is one example of what can happen when the difference between market value and actual value becomes too great.

Environmentally minded economists have long warned that equally burstable ecological bubbles can occur if humanity lives beyond earth鈥檚 capacity to regenerate. The problem, they say, is that we鈥檙e addicted to economic growth. Mainstream economics assumes that the economy, the engine of modern civilization, can grow perpetually.

But if growth means ever-increasing consumption of natural resources (and it has, since the start of the Industrial Revolution 250 years ago), then it can鈥檛 continue indefinitely. Earth and its resources are finite.

Herman Daly, an economist at the University of Maryland鈥檚 School of Public Policy in College Park, says that humanity is already at or beyond the point where economic growth is counterproductive, where the environmental and social costs more than cancel the gains.

鈥淪o-called 鈥榚conomic鈥� growth already has become uneconomic,鈥� Professor Daly stated in a talk last spring. 鈥淭he growth economy is failing.鈥�

For some time, Daly and others have called for a rethinking and restructuring of our economy before nature restructures it for us. The notion of perpetual economic growth warrants scrutiny before it drives us over a cliff, they argue. The science of economics must be overhauled to better account for earth鈥檚 physical realities. Civilization won鈥檛 have to stop in its tracks, just shift emphasis, says Daly. The 鈥渟teady state economy鈥� he foresees emphasizes qualitative development over quantitative growth. 鈥淕rowth is more of the same stuff,鈥� he says. 鈥淒evelopment is the same amount of better stuff.鈥�

In his 2000 book, 鈥淪omething New Under the Sun,鈥� John McNeill, professor of environmental history at Georgetown University in Washington, D.C., tells how unprecedented the past two centuries of human history have been.

鈥淢ost economists are under the impression that 2 to 6 percent annual growth is a normal condition for human society,鈥� says Professor McNeill. 鈥淎 longer historical view would tell you such growth is a peculiar period in human society.鈥�

Growth unprecedented in history
For the vast majority of human history, stasis was the norm. After AD 1, it took the human population 1,500 years to double in size to between 400 million and 500 million. But since 1820, population has increased more than sixfold, to 6.6 billion. That鈥檚 an incredible achievement for a species that, at the beginning of the agricultural revolution 10,000 years ago, was outnumbered by baboons, writes McNeill.

In the past 200 fossil-fueled years, the per capita growth of the gross world product (the total market value of goods and services) has far outstripped population increase. People are richer and live longer. But no one should overlook the cost, says McNeill. In that period 鈥� and especially during the 20th century 鈥� humankind has transformed the earth.

At the dawn of the Industrial Revolution in the late 1700s, English demographer Thomas Malthus foresaw problems with growth. If populations grew while resources remained constant 鈥� the tendency, he thought 鈥� there would be less for each person. Most people would end up poorer and more miserable.

That generally hasn鈥檛 occurred. On average, people are much richer. (In absolute terms, about the same number of people are poor today 鈥� 800 million 鈥� as in Malthus鈥檚 time.) Malthus failed to account for innovation and technology, which have let humanity squeeze more and more from the same quantity.

Or is it just 鈥榯he new Malthusianism鈥�?
For this reason, Pat Michaels, senior fellow in environmental studies at the Cato Institute in Washington, D.C., a libertarian think tank, dismisses any talk of the need for sustainable development as 鈥渢he new Malthusianism.鈥� The market will self-correct, he says. When materials become scarce, prices will go up. Consumption will drop. That will spur innovators to develop alternatives. It is this very dynamism that makes modern societies sustainable. 鈥淚n reality, the development that we have is, ipso facto, sustainable,鈥� he says.

Peter Victor, an economist at York University in Toronto and author of the forthcoming book 鈥淢anaging Without Growth,鈥� has a slightly different view. Yes, innovation theoretically could keep the economy humming along forever, he says. Unfortunately, that hasn鈥檛 happened.

鈥淭he pace at which we鈥檝e become more efficient hasn鈥檛 kept pace with the rate of growth,鈥� Professor Victor says. For example, prices for raw materials have gone down even as the environment has become increasingly degraded. This suggests a flaw in market pricing.

鈥淲e would have thought that the price system would have given us a signal that we were doing this,鈥� Victor says. 鈥淎nd it鈥檚 not giving us that signal.鈥�

This is a recurring complaint among environmental economists: The science of economics often treats economies as if they exist in a vacuum. Environmental costs 鈥� greenhouse gases, waste, overfishing 鈥� are rarely reflected in market prices.

That was fine in times past, when a large margin separated the edges of the human sphere from the limits of earth鈥檚 biosphere, says Robert Costanza, director of the Gund Institute for Ecological Economics at the University of Vermont, Burlington. But now the margin is much slimmer 鈥� perhaps totally gone 鈥� and omitting the true cost has become a liability.

鈥淲hen the markets get out of kilter with reality, that鈥檚 what causes bubbles,鈥� Professor Costanza says. He doesn鈥檛 advocate squelching the market, but guiding it 鈥� and not being guided by it: 鈥淭he market is a good servant, but it鈥檚 a poor master.鈥�

Ecological economists say we can start by examining economic yardsticks like Gross Domestic Product. GDP counts oil spills and other calamities that cost money to fix as additions, or positives. GDP has no way of counting important things like growth of leisure time or the contributions of stay-at-home parents.

鈥淵ou get what you measure,鈥� says Jim Barrett, executive director of the nonprofit Redefining Progress in Washington, D.C., which has developed an alternate Genuine Progress Indicator. 鈥淎nd we don鈥檛 measure things that matter.鈥�

Shift tax from income to raw materials
Daly, a former senior economist in the World Bank鈥檚 Environmental Department, has other recommendations. Scarce re颅颅sources should be taxed at the point of extraction. Cap-and-trade systems should tax waste returning to the environment. Reduce personal income taxes to keep the overall tax burden the same. As Costanza says, 鈥淭ax bads rather than goods.鈥�

These structures will drive the economy in the direction of frugality, which begets efficiency, says Daly. The economy鈥檚 emphasis will shift from production to service and maintenance, from 鈥渕ore and more鈥� stuff to the same amount of ever-better stuff. In such an economy, companies would probably shift from selling products to leasing them. He points to Interface Inc., in Atlanta, a 鈥渃losed loop鈥� company that leases out carpeting and then gathers it for recycling when it wears out.

鈥淲e can鈥檛 live without polluting and depleting,鈥� says Daly, 鈥渂ut it鈥檚 a question of keeping it within the limits of the biosphere.鈥�

To this list Costanza adds the creation of new institutions to manage property owned by all, like air and sea.

鈥淲e need to develop new institutions that own global commons like the atmosphere,鈥� says Costanza. 鈥淩ight now, nobody owns the atmosphere, so dumping whatever you want into it is OK.鈥�