Post Keynesian and Ecological Economics
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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.
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Chapter 2: Recent Developments in Post Keynesian Methodology and their Relevance for Understanding Environmental Issues

Andrew Mearman


Andrew Mearman INTRODUCTION Until quite recently, Post Keynesian economics has had relatively little to say about the economics of the environment (Mearman, 2005a, 2005b). Much of this new work stems from a methodological critique of neoclassical economics, borrowing heavily from the philosophy of science as well as economic methodology, and from increased awareness of and concern for the environment. The methodological developments are located in three main literatures, all of which have a potential impact on how Post Keynesians understand environmental issues. First, the recent rediscovery of Keynes’s writings on philosophy and ethics have led to a fresh interpretation of his economics. Especially important is the Treatise on Probability (Keynes, 1921), which contains a critique of existing theories of probability and develops an alternative theory. This work has led to a better understanding of methodology, of uncertainty, and of assorted theoretical issues, such as the role and existence of money in the economy. Two literatures, both inspired by Keynes, are more controversial. These are not universally accepted by Post Keynesians, many of whom regard them as incorrect, or at best distracting from theoretical and empirical work. Babylonianism,1 developed principally by Sheila Dow, holds that science does not search out great truth claims; rather, the aim of theory is explanation and understanding. The nature of reality, comprising organic, complex and open systems, dictates that complete explanations are impossible. The Babylonian approach shares much with that of Keynes. Indeed, Keynes’s approach might be described as Babylonian; he even used the term...

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