Another well-written post from the Daly News landed in my in-box last week. It's focus was how economics has ignored thermodynamics over the years and centuries. I touched on the issues it raises in my talk at Cambridge last week by reference to Manchester students' pleas for post-crash economics – that is a discipline that treats the real world as if it actually existed. Here's an extract from the Daly News piece:
By modeling the economy as a closed and circular system, neoclassical economists have encouraged themselves to operate in a methodologically enforced state of denial about the physical roots and ecological consequences of our wealth-creating activities. And yet economics has experienced no paradigm-shaking crisis as a result. Neither climate change nor any of the other source-and-sink catastrophes facing civilization have been laid at the feet of bad economic theory. One reason: Neoclassical economists succeed in treating environmental costs as “externalities.” How could environmental degradation be the result of economic activity if it’s external to the economy?
Indeed. Read on; it's good stuff.
Responses
Have you read Speth on this? Worth your time:
http://yalepress.yale.edu/book.asp?isbn=9780300136111