Integrating Economics and Ecology: A Case of Intellectual Imperialism?

Abstract

An issue at the heart of American forestry is the attempt to integrate ecological and economic approaches to environmental management. The modern debate harks back to the ideological struggle between Gifford Pinchot's wise-use approach to conservation and Aldo Leopold's or Harold Ickes's nonutilitarian, ethical approach. The four books reviewed here suggest that the issues are still in ferment. Interdisciplinary attempts to integrate ecology and economics date back to the nineteenth century. As Martinez-Alier's at times incoherent and always polemical Ecological Economics points out, nineteenthcentury physicists, biologists, and chemists generated an extensive literature linking an energy theory of value, based on ecology, to the Marxist labor theory of value. According to Martinez-Alier, the scientists' energy-flow accounts (which measured values in terms of energy input/output ratios) demonstrated the "indisputable superiority" of traditional peasant agriculture in underdeveloped countries over capitalistic practices: it proved that peasant agriculture could feed "the population with minimum use of nonrenewable forms of energy" (p. 241). But these nineteenth-century ideas fell on infertile ground, and the world turned instead to capitalist systems, which rely on market prices to measure value. This choice, says Martinez-Alier, led to the waste of energy resources in overdeveloped countries, the unequal distribution of energy resources between the developed and dependent countries, and a continuing class struggle. According to Martinez-Alier, the new interdisciplinary ecological economics being developed now will vindicate and extend a Marxist-based ecological revolution throughout the Third World. Very open-minded members of the Forest History Society who want better to understand the ideological aspect of international debates may find this book of interest. They may also want to compare his view with that found in Donald Worster's widely read history of ecology (Nature's Economy), which accuses economics of foisting energy-flow accounting off on ecology, rather than vice versa. Worster differs with Martinez-Alier in focusing on the twentieth rather than the nineteenth century, and in seeing the energyflow accounting approach as essentially capitalist. Martinez-Alier, of course, sees the approach as conflicting with capitalist market values. Except for the inherent interest of such comparisons, however, I find Martinez-Alier to be a waste of intellectual energy. Charles Perrings's Economy and Environment presents a more formidable and formal case against the "market solution" to environmental problems. Perrings attacks the market solution's emphasis on the sovereignty of the individual, the sanctity of private property, and the domination of the present. In its place, Perrings suggests a positive role for the collective good, which goes beyond the mere adding up of individual satisfactions. Perrings extends the Marxist view of ecological economics by applying the formal logic of matrix algebra to the problem of interactive economic and ecological systems. His analysis suggests that the market solution to environmental-resource allocation flounders on three grounds. First, because it is strictly atomistic and individualistic, it has no way of assessing the collective social good. Second, because it lacks adequate feedback loops to capture interactions between the environment and the economy, it generates increasing uncertainty and increases environmental and economic instability. Third, it lacks an effective way to value the externalities that are pervasive in dynamic and evolutionary (read dialectical) systems. Perrings's book is an excruciatingly painful way to learn several elementary lessons: (1) Economic systems interact with environmental systems (defined as those beyond human control). (2) Market prices, and therefore the market solution, do not take into account all interactions between economic and environmental systems. (3) The trajectory of unstable and evolutionary economic and environmental systems is uncertain. (4) Discounting the interests of future generations at (presumably high) private rates of time preference is less egalitarian than discounting those future interests at (presumably low) social rates. (5) If "society" wants to protect the environment from unforeseen catastrophe, it should sell environmental "usufruct" bonds, the price of which will depend upon the potential environmental losses to society (including all future members) in a worst-case scenario. "The presumption that the appropriate time horizon . . . is one that encompasses intergenerational issues leads to the conviction that . . . the collectivity and not individuals within it . . . should determine the environmental strategy adopted by society" (p. 151, emphasis added). Not only Marxists hold that the market solution to environmental management is flawed by its acceptance of atomistic individualism. Mark Sagoff, an environmental philosopher, argues in The Economy of the