Lec­ture05 Why Econ­o­mists Dis­agree: The com­mon blindspot on the Envi­ron­ment

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The posi­tion of the econ­omy in the envi­ron­ment is a shared blindspot in eco­nom­ics: no exist­ing school han­dles the topic well, and yet this is the key issue we need to under­stand. I explain the Laws of Thermodynamics–as well as I could in an intro­duc­tory class with­out using mathematics–and pro­vide some links to impor­tant top­ics that stu­dents wouldn’t nor­mally hear about in an eco­nom­ics degree.

Click here for the Pow­er­point slides.

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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  • New­town­ian

    Hi Steve, Great to see this post at last (if not the so far very lim­ited stam­pede of views/comments — hope­fully this will change?

    I had been wor­ried that like the rest of the main­stream (non eco­log­i­cal) eco­nom­ics com­mu­nity you were hav­ing trou­ble with silo­ing. But you have allayed my fears entirely with this offer­ing. Some part­ing com­ments.

    1. Any chance you could repost the link to the Dutch student/lecturer dis­cus­sion? It sounds like fun to watch.

    2. I was delighted to see you didnt limit your focus to cli­mate change. That is one issue that seems to be get­ting the main­stream to ques­tion their par­a­digms — but then they dont take it fur­ther back to the other Goril­las in the room like foot­print analy­sis and of course the LTG heresy.

    Or at the least attacks the non­sense that infi­nite growth is pos­si­ble or admit econ­o­mists need to urgently under­stand what their nat­ural sci­ence col­leagues have been scream­ing at them for over 40 years.

    3. On the mat­ter of energy and nat­ural resources, in case you havent seen it you might be inter­ested in “STEEN, B. & BORG, G. 2002. An esti­ma­tion of the cost of sus­tain­able pro­duc­tion of metal con­cen­trates from the earth’s crust. Eco­log­i­cal Eco­nom­ics, 42, 401–413. (they also have a fol­lowup on phos­pho­rus). and BARDI, U. 2010. Extract­ing min­er­als from sea­wa­ter: an energy analy­sis. Sus­tain­abil­ity, 2, 980–992.

    If you com­bine their fig­ures (Bardi is a fac­tor of 10 out but the prin­ci­ple is ok) with cur­rent pri­mary mate­r­ial demand from the USGS e.g. U.S. GEOLOGICAL SURVEY 2011. Min­eral com­mod­ity sum­maries 2011. you will find another illus­tra­tion of your con­cerns in that the amount of energy required to mine bedrock as some econ­o­mists think pos­si­ble is beyond a joke.

    I men­tion this because it was one of those econ­o­mist fur­phies pro­posed by the great Dr Strangelove model and futur­ist in our younger years — Her­man Kahn — who wasnt stu­pid and should have known bet­ter.

    4. An inter­est­ing and under­ap­pre­ci­ated degra­da­tion form of inter­est to neo-phys­iocrats is the degra­da­tion of land pro­duc­tiv­ity. Of course there is the issue of replac­ing pri­mary nutri­ents, but changes in cations and ero­sion are just as con­cern­ing and more like a can­cer — have a look on Googlearch images of the Ama­zon River. Its not just the defor­esta­tion.

    5. Any thoughts on the pointy end of pol­icy change .… in par­tic­u­lar the lack of recog­ni­tion of the issues you present by so called Green politi­cians and their lack of abil­ity to deal with Devil’s Alter­na­tives — I rec­om­mend look­ing at the joke eco­nomic pol­icy of the Aus­tralia Greens in this regard. Last time I looked they still didnt seem to get it like you obvi­ously do.

    Sep­a­rately any thoughts on Naomi Klein?

    6. Finally your piece pleases me greatly because I have been search­ing in vain for years for evi­dence that pro­gres­sive econ­o­mists of the ori­en­ta­tion you can read via the RER web site and see from the Stiglitz mob under­stand the need for change in the pro­fes­sion.

  • Josh Floyd

    Hi Steve, this is a ter­rific use of Tom Murphy’s work to make the case for lim­its to eco­nomic growth, thank you.

    I’d highly rec­om­mend also read­ing this post from Tom: http://physics.ucsd.edu/do-the-math/2013/05/elusive-entropy/. It’s a highly acces­si­ble treat­ment of prob­lems with the way the sec­ond law of ther­mo­dy­nam­ics is inter­preted in eco­log­i­cal eco­nom­ics. The case that Tom makes is very sim­i­lar to one that I make in a 2007 arti­cle in the jour­nal Futures (which I sent to you for ref­er­ence mid last year, but pos­si­bly went by you as I think you were i in the process of mov­ing to the UK around then).

    I’d be very happy to talk fur­ther with you some­time about impli­ca­tions for pre­sent­ing mate­r­ial on phys­i­cal lim­its in con­text of eco­nomic think­ing, if you felt that would be ben­e­fi­cial.

    Kind regards,
    Josh Floyd

  • Many thanks Josh,

    I did miss that paper–please resend it to me: debunk­ing AT gmail DOT com. And that con­ver­sa­tion would be incred­i­bly ben­e­fi­cial. Drop me a line and let’s arrange to have a chat on Skype.

  • maifei2050

    Hi Steve
    Great to lis­ten to your lec­ture. I was won­der­ing where you stood on the ecol­ogy issue.
    BIG Ques­tion: If the cur­rent debt/money sys­tem is faulty and human civil­i­sa­tion is in eco­log­i­cal over­shoot, what would a new money/economic sys­tem look like that can reduce and then sta­bilise human impact on the planet?

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  • Bhaskara II

    Happy New Year pro­fes­sor Keen and every one!

  • It’s won­der­ful to hear an econ­o­mist talk­ing about the laws of ther­mo­dy­nam­ics, not to men­tion refer­ring to The LIm­its to Growth. Bravo!

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