Table of Contents

Post Keynesian and Ecological Economics

Post Keynesian and Ecological Economics

Confronting Environmental Issues

Edited by Richard P.F. Holt, Steven Pressman and Clive L. Spash

It is argued that mainstream economics, with its present methodological approach, is limited in its ability to analyze and develop adequate public policy to deal with current environmental problems and sustainable development. This book provides an alternative approach. Building on the strengths and insights of Post Keynesian and ecological economics and incorporating cutting edge work in such areas as economic complexity, bounded rationality and socio-economic dynamics, the contributors to this book provide a trans-disciplinary approach to deal with a broad range of environmental concerns.

Chapter 1: Post Keynesian and Ecological Economics: Alternative Perspectives on Sustainability and Environmental Economics

Richard P.F. Holt and Clive L. Spash

Subjects: economics and finance, environmental economics, post-keynesian economics, environment, environmental economics

Extract

Richard P.F. Holt and Clive L. Spash INTRODUCTION For some time now the standard neoclassical economic model has been criticized from numerous directions. It has been criticized for assuming that people are solely rational and selfish, while in reality it seems that diverse inclinations seem to drive human behavior.1 Another problem is the assumption of perfectly competitive markets as well as the existence of pervasive future markets to deal with the long-run consequences of present decisions; yet such markets do not exist. From these assumptions, neoclassical analysis then demonstrates the existence of a stable and optimal equilibrium. It concludes that government policies cannot make us better off. In short, like Dr Pangloss in Voltaire’s Candide, we are supposed to live in the best of all possible worlds – a result that seems to be contradicted by our daily experiences. These problems are quite prevalent when neoclassical economics seeks to analyze the environment and issues surrounding sustainability. Ecological economists have pointed out these problems by stressing the interaction between individual, social, ecological and economic life, as well as the long-term consequences of the complex choices we make today. For example, they have criticized the assumption of rational consumer choice since many environmental consequences of human decisions will remain unknown for many years. Furthermore, they have also questioned traditional methods of measuring and estimating values related to the quality of life, non-market goods, sustainability and social welfare. Post Keynesians, too, have criticized the standard economic model. They have developed a notion of social...

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