Economic Sociology of Capitalist Development
Edited by Yuichi Shionoya and Tamotsu Nishizawa
Chapter 8: The Limits to Growth: Alfred Marshall and the British Economic Tradition
8. The limits to growth: Alfred Marshall and the British economic tradition Katia Caldari and Fabio Masini* 8.1 ECONOMIC THEORY AND THE LIMITS TO GROWTH In an authoritative study on Valuations for Sustainable Development, Sylvie Faucheux and Martin O’Connor (1998: 1) stated that the ‘classical economists in the eighteenth and nineteenth centuries tended to regard the primary environmental supports for economic production activity as either non-scarce (such as air) or non-depletable (such as arable land)’. As Perelman (2002: 1) has underlined, the biggest paradox of economics seems to be that it is a science based on the scarcity of means but built on the hypothesis of non-scarcity of production factors. Nevertheless, this paradox does not seem to apply to ‘eighteenth- and nineteenth-century’ economists. They were perfectly aware of inputs scarcity. They could not escape considering air as a free good but they soon started to consider fresh, healthy air as a scarce input for human activities. And land, water and minerals very soon appeared to be ‘scarce’. It is only with Hotelling (1931) that economic theory starts to consider absolute scarcity, even for non-renewable resources, as a mere transitory problem which does not harm production perspectives, thanks to input substitutions brought about by changes in relative prices.1 Faucheaux and O’Connor insist on the fact that Malthus and Mill were the only exceptions among the economists of those centuries, but only for ethical reasons. Opocher (2007) extended this ethical preoccupation also to Marshall but this idea may be (and indeed...
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