Sunday, January 11, 2015

On The Origin of Ecological Economics

There are two questions here to be answered, one of which has a new answer.  The first is the origin of the concepts that make up modern ecological economics.  The second, which has a new answer, is who first neologized the label:"ecological economics"?

Let me answer the second first.  The term became widely know after the journal of that name, Ecological Economics, was founded in 1989 by the ecologist, Robert Costanza.  Very briefly speaking, it has contrasted itself with "environmental economics," which is viewed as being based on conventional mainstream neoclassical economics, studying how to internalize externalities and also how to properly provide environmental public goods as studied in the "market failure" approach of economics.  The general stance of ecological economics, which has numerous sub-branches that squabble much with each other (and which I am not going to get into here and now) views this as insufficient.  It emphasizes needing to more clearly and explicitly incorporate both insights from and the modeling of ecology in connection with economics to emphasize and focus on the ecological foundations of economies, that real world economies are ultimately embedded within ecosystems, which are duly impacted by feedback from those economies.  The journal has from the beginning claimed to take a "transdisciplinary" approach.

So, initially Costanza and those around him who founded the journal claimed to have coined the term, with it unclear which of that group initially did so, it more or less emerging from ongoing discussions.  Some of those included Ann Marie Jansson (some have pointed to her as the originator), Carl Folke, Cutler Cleveland, and the more senior and well-known Herman Daly, among others.  It supposedly arose around then, in the late 80s.  But, I long knew they were wrong because I had been using the term for years prior to that period of time (the only one of those people I knew prior to then was Daly).  But, I did not coin it and never have claimed to have done so.

Where did I get it?  From the regional scientist, Walter Isard, who had served on the thesis committee at Penn of my major professor, Eugene Smolensky (with whom I studied at University of Wisconsin-Madison).  In 1972, he published a book with four otherwise completely obscure coauthors whom I shall not list entitled _Ecologic-Economic Analysis for Regional Development_, New York: Free Press, which I bought a copy of at the time and read thoroughly.  He proposed using an old standby of the old regional science, input-output analysis, to do this.  The crucial idea was that in the I-O matrix one could essentially break it into four broad sub-matrices: an economy to economy one, an economy to  ecology one (think pollution), an ecology to ecology one (Eugene Odum was already conceptualizing ecosystems as I-O systems, which species consumes which species), and ecology to economy (lots of stuff).  Each sub-part could have lots of detail.  I am not sure the precise phrase "ecological economics" appeared in that book, but it was pretty much there in the title, and from reading that book on, I thought in such terms.

The new news is that the term was used even earlier.  A new paper in Ecological Economics, the December 2014 issue to be precise, by Qi Feng Lin, "Aldo Leopold's unrealized proposals to rethink economics," 108, pp. 104-114, identifies the famous forestry ecologist, professor of game and wildlife management, and father of the "land ethic" from the University of Wisconsin, which he coined in his most famous work (published posthumously in 1949), _A Sand County Almanac_ (for those in Madison, Leopold was also the father of the UW-Arboretum.). It turns out that at the very end of his life, when he was writing A Sand County Almanac, Leopold was indeed doing a broader rethinking of economics from a strongly ecological orientation, including drawing a diagram that looks like Quesnay's Tableau Economique could have done it of "food chains" that go from the natural world to the economic world.  However, the bottom line on the phrase itself is that he wrote a memo to the University of Wisconsin administration in 1947 in which he proposed that there be a position created at the UW in, yes, "Ecological Economics."  Given his untimely death not too long after, there was no action on this, and Leopold's memo remained obscure and unknown as near as I can tell until unearthed now by Lin.

So, what about the origins of the ideas of modern ecological economics?  Well, I think the key here is in fact in what we see in Isard and Leopold, input-output analysis and its relatives.  Indeed, the second paper in the journal, Ecological Economics in 1989, was a paper by Paul Christensen, "Historical roots for ecological economics - biophysical versus allocative approaches," 1(1), pp.17-36.  Rather than going to the usual suspect, Malthus, he went to Quesnay and the physiocrats, with his Tableau Econoimique long being viewed as the fountainhead of input-output analysis, and certainly emphasizing land and nature as the foundation of the economy.  That is probably the fundamental source, although most economists of that era and earlier wrote much about agriculture and its ecological foundations, with an even earlier candidate possibly being William Petty.  As it is, I note that Herman Daly's first important publication was in the JPE  (of all places) in 1973, a year after Isard et al's book, "Economics as a Life Science," essentially followed him by proposing at the aggregate level the quadripartite I-O approach that Isard and crew had already laid out the previous year.  In any case, as sort of the older godfather of the Costanza group, Daly provides the crucial link between these earlier appearances of the concept and its full emergence at the end of the 1980s.

Barkley Rosser


Sandwichman said...

K. William Kapp was certainly a forerunner of ecological economic thinking, whether or not he used the term "ecological economics".

Peter Dorman said...

John O'Neill thinks Otto Neurath should get some credit. I'm not sure, but I have to give a lecture on the general topic in a couple of days, so I will probably come to some sort of tentative opinion. said...

Someone I left out who was more or less coincident with the Costanza group and is on the Ecol-Econ ed board, is Joan Martinez-Alier, who went by Juan Martinez-Alier back then (he has shifted to the Catalan version of his first name from the Castilian Spanish version). In his book from 1990 on Ecological Economics he mentions both Kapp and Neurath, as well as a large number of mostly 19th century figures little known to most modern economists of any stripe. said...

Someone I left out who was more or less coincident with the Costanza group and is on the Ecol-Econ ed board, is Joan Martinez-Alier, who went by Juan Martinez-Alier back then (he has shifted to the Catalan version of his first name from the Castilian Spanish version). In his book from 1990 on Ecological Economics he mentions both Kapp and Neurath, as well as a large number of mostly 19th century figures little known to most modern economists of any stripe.

Thornton Hall said...

The idea of "science x" + economics is a very instructive one, in my opinion. In many ways, the Enlightenment can be described as "applying Newton to human affairs." To the extent that that means the belief that human behavior can be understood by investigation and that human society can be seen to function more or less well, then this is a force for good.

But to the extent it has been interpreted to mean human society is mechanical or behavior can be systematized, then it is bound to be wrong. There are probably causal reasons for why Newton came first and was the model of the Enlightenment and Darwin came second, ushering in the modern age. But what if the order had been reversed?

In that case, "ecological economics" would likely be known as "economics" and it would reflect reality. In another sphere "ideology" would only occur at high levels of abstraction, and political agents would be seen as having identities and interests, not ideologies. said...

Well, Thornton, maybe that is as it should be, but the vast majority of economics is done without even the remotest nod in the direction of ecology.

Thornton Hall said...

When I first stumbled into the econ blogosphere, humanities major and law school grad, I just sort of assumed that "models" meant simulations of the sort I was vaguely familar with from meteorology and which I believe have proven useful in ecology as well. I mean, what else could they be doing?

That question is still with me. Coming from that perspective, I must admit that the sociology/psychology of economics is flabbergasting. An educated man looks at the world to be understood, then looks at the men paid by taxpayers to understand it, and says, "Wait, what?"

It's like the old Maine joke, "you can't get there from here." Except it's not funny. Because unlike geography, there really is no way from point A to point B. The bizarre thing is trying to understand how some people think there could be.

Jim Rose said...

A mate suggested that I look into ecological economics. The self-appointed visionaries of ecological economics were so concerned about the population bomb that they proposed a “choice-based, marketable, birth license plan” or “birth credits” for population control. The Earth’s carrying capacity is a central issue in ecological economics.

Birth credits were promoted by urban designer and environmental activist Michael E. Arth since the 1990s and earlier by economist Kenneth Boulding (1964) and ecological economist Herman Daly (1991). I am not making this up.

Birth credits would allow any woman to have as many children as she wants, as long as she buys a license for any children beyond an average allotment that would result in zero population growth (ZPG). Birth credits are similar to individual tradable quotas for fishing.

If the allotment was determined to be 1.1 children, then the first child would be free, and the market would determine the cost of the license or birth credit for each additional child.

The units could be sold in units of 1/10th of a credit with each of us getting 1.1 credits each for free, under some proposals.

Being nice members of the middle class, the penalty proposed for an illegal baby would be community service for the parents. I am sure most parents would welcome the time out of the house and the free child care. Obviously, these nice family unfriendly educated middle class ZPG types do not seem to appreciate the seas and oceans that some with cross to have a child.

Arth, Dally and his fellow prophets were smug enough to think they could see the future and a looming population bomb and food riots, but plainly they got the sign of the demographic crisis wrong.