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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 12: Environmental Innovation: A Post Keynesian Interpretation

James Juniper

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


James Juniper INTRODUCTION This chapter draws on Porter and van der Linde’s article, ‘Green and competitive’, which addresses the potential for corporations that are increasingly required to meet stringent environmental regulations to achieve sustainable improvements in their competitive advantage. Porter’s arguments are employed to weave together two strands of research. On the one hand there is the literature on ‘smart’ or ‘responsive’ regulation that is largely derived from a juridical framework. This strand of research posits that we are currently witnessing the evolution of a ‘third way’ to both develop and implement systems of regulation and corporate governance. On the other hand there is the chartalist literature, which places emphasis on the role of government in creating net financial assets through deficit spending, which can be applied to the task of achieving full employment through the provision of largely full-time jobs within the public sector. More recently, on chartalist grounds, Mitchell and Juniper (2007) have advocated a ‘spatial Keynesian’ form of employment creation to be achieved through a regionally implemented job guarantee. This policy intervention has an advantage over traditional Keynesian expansionary programmes (without positing the necessity for any mutual exclusion), which require large-scale investment in public infrastructure; insofar as employment opportunities can be specifically targeted at regions of high unemployment. The first of these strands is subject to criticism on the basis of an alternative theoretical framework developed by William Lazonick and Mary O’Sullivan. While their notion of the ‘social conditions of the innovative enterprise’ provides a Chandleresque critique...

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