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The Economics of Nature and the Nature of Economics

Edited by Cutler J. Cleveland, David I. Stern and Robert Costanza

This book discusses important recent developments in the theory, concepts and empirical applications of ecological economics and sustainable development. The editors have assembled a fascinating collection of papers from some of the leading scholars in the field of ecological economics.
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Chapter 1: Early links between sciences of nature and economics: historical perspectives for ecological and social economics

Paul P. Christensen


Paul P. Christensen INTRODUCTION The relationship between ecological economics and neoclassical economic theory continues to be problematic. Many ecological economists argue that standard market theory when corrected for externalities or extended to include environmental accounting provides a satisfactory framework for analysing economic processes and environmental problems. Daly and Cobb (1989), for example, ‘affirm the value and validity of marginal analysis’ (p. 85) and accept (with corrections to the model of homo economicus) the basic framework of microeconomics (ibid., pp. 145, 164). In a paper intended to introduce the economics profession at large to the concepts and methods of ecological economics, Perrings et al. (1995) define ecological economics as the joint dynamics of economic and ecological systems (p. 3). A central concern of their paper is the need for ‘the development of a coherent theory of the dynamical behaviour of ecological–economic systems based on an axiomatic structure that respects the properties of ecological and economic systems’ (ibid., p. 35). But what properties of economic systems are to be respected? It is readily apparent that the mechanistic individualism of modern (neoclassical) economic theory is inconsistent with the materials, energetic and organismic interdependence that structures ecological systems. Indeed, a similar interdependence necessarily characterizes the resource, technological and organizational structures of human production systems. Given the joint interdependence of human and environmental production, we cannot avoid a confrontation with the marginalist and equilibrium conceptions of neoclassical theory which explicitly posit a radical Cartesian individualism inconsistent with the physical, biological, psychological and social properties...

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