Ecological economists are on a mission to change the world.
In ‘Expert Talk’ we speak to inspiring experts from a specific field, who shed their light on pressing topics. This time: professor in ecological economy Joshua Farley.
Josh Farley talks about Ecological Economics. Visual by Mavin Studio. Josh Farley is a professor and teacher in Ecological Economics. It’s fair to say this field is somewhat unknown. To explain it, Josh says we need to start with economics. ‘’In the words of Karl Polanyi, economics is about how humans make their living interacting with their social and natural environments. So, it's how we interact with each other and with nature to meet our essential needs. But the definition of economics has too often been narrowed to market economics.’’
So how does ecological economics differ from market economics?
‘’Everything we make eventually breaks down, wears out and returns to nature as waste. When we burn a barrel of oil, we haven't destroyed energy, but we've made it useless waste that pollutes our environment and can't be reused. And in the past 100 years we've increased the size of our economy like 36 times, as the result of increasing population and per capita consumption, and it hasn't grown into empty space. It's grown into a finite planet, which means we really need to put ecological limits front and center. Ecological economics basically just says that: because we live on a finite planet, we can't grow forever. We have to pay close attention to who gets what; distribution becomes really important.’’
The constraints of the world have been neglected, whereas we first talked about maximizing welfare, subject to ecological limits, this is no longer possible. ‘’We have surpassed our planet's carrying capacity, we've got to stop thinking about increasing consumption, but instead focus on providing secure sufficiency for all at the lowest ecological cost. So that we meet our basic needs and can spend a lot of our remaining time doing things that provide the joys of life and of being a human.’’
“Regular economic programs try to boil it down to mathematical equations in which everything goes to equilibrium in order to maximize monetary value, which means allocating resources to those with money, not with those with need.”
Economics as moral philosophy
Distinguishing between ecological economics or market economics is important, according to Josh. ‘’If you take a class in economics now, they're just talking about markets, which is just one way of doing economics. Ecological economics really starts out from the idea that the economy is a biophysical system. It's subject to the laws of physics and the laws of ecology, and it is contained and sustained by our finite planet where all resources available to make anything in our economy come from.’’
Whilst doing his PhD in the state of New York, United States, in one of those neoclassical market economics programs himself, he realized that his interest lies elsewhere. ‘’I travelled a lot and realized that there were major problems with poverty and environmental degradation. I did a master's degree in international development, and one of my advisors suggested I go into economics to further study this, and I did.’’ He went into the program but soon found out his views didn’t align. ‘’I think of economics really as moral philosophy, but in the program they try to boil it down to mathematical equations in which everything goes to equilibrium in order to maximize monetary value, which means allocating resources to those with money, not to those with need. So you want to maximize the value of a loaf of bread, sell it to the rich person instead of the destitute mother trying to feed her kids. And I just realized; that’s not what I'd signed up for. I'm in this terrible PhD program based on bad science and worse ethics; I want to become an ecological economist.’’
Infinite growth. Visual by Mavin Studio.Changing the world
When asked what the field of the ecological economist tries to achieve, Josh is resolute. ‘’We try to change the world.’’ Although he is in turn surprised when people are surprised about hearing that. ‘’Because every social scientist is trying to change the system.’’ Ecological economists have very specific goals of achieving ecological sustainability and fair distribution.
Josh mentions Donella Meadows - an environmental scientist - as one of his favourite system thinkers. ‘’One of her leverage points to changing complex systems is to change the paradigm. And the mainstream economic paradigm is one that presents the economy as a whole: we can grow forever. It's built into all the models, all the assumptions that the economy will just grow exponentially indefinitely, which implies there's no limits. Ecological economics basically say: we're flipping the paradigm around. The economy is the part, not the whole. We need to internalize the economy into our natural systems.’’
There are many such paradigms to be changed, ones that have been so ingrained it has become hard to change. ‘’GDP, as an indicator for society's standard of living, is a useless indicator. I ask my students, in a class of a hundred, what's the average height here? Let's add to that the tallest person in the world. How much did our height change? Basically, not at all. The average is almost the same. Now take your average income and add to that the richest person in the world. How did it change? Immensely. None of you mean anything. Only the one rich person means something. Averages are just an idiotic measure when it comes to what they call power law distributions, which is how income is distributed. It says very little about the situation per individual. And yet economists always talk about these useless indicators.’’
“We have all these people who decided that with capitalism, we have to have private property rights and individual choice for everything, no matter how absurd that might seem. It’s not that I’m opposed to markets. I just think markets have a place and they’re good for solving some types of problems and absolutely horrendously bad at solving others.”
Alternatives for capitalism?
Besides requiring a new, fresh look at old standards and norms, the major challenge is a change of the economic system, and thus the society, we live in. Everybody is aware that our systems of capitalism cause consumerism and is at the root of our climate problems. But what are the alternatives? ‘’We have all these people who decided that with capitalism, we have to have private property rights and individual choice for everything, no matter how absurd that might seem. It's not that I'm opposed to markets. I just think markets have a place and they're good for solving some types of problems and absolutely horrendously bad at solving others. But academic economics programs are too often run by ideologues, people who are either all capitalism all the time, or all socialism all the time.’’
A radically different system -although very natural to us - is the gift and reciprocity economy. ‘’Like if I bought this shirt I’m wearing at 80% off; ‘I'd say, oh, great, it costs me less than it costs somebody to produce it, and I'm happy about it.’ Whereas in a gift and reciprocity economy, I'd feel terrible about that. And these types of gift and reciprocity relationships were the dominant form of economy when we were small hunter-gatherer bands where we knew each other well. The hunter who brings home the large animal, more than that person can eat and is huge amount of work to process it, shares it with those who have less. It sacrifices very little welfare on the part of the hunter, but gives immense welfare to the rest of the community. Now the others want to reciprocate, they're going to feel this debt, this social obligation to repay. So, every economic interaction in a reciprocity gifting economy strengthens social ties. It is not merely a business transaction. You don't write a thank you note when you go to the store. For example, with your family or your friends, if you give a loved one a gift, you would feel terrible if your gift was way less thoughtful or less valuable or less meaningful than the one they gave you. We strive for fairness in a gift economy. In a market economy, we want to get the best deal possible.’’
‘’When I ask my students what kind of economy they were raised in; inevitably, they say capitalism. And I say, ‘oh, your parents charged you room and board?’ No, they were raised in a reciprocity and gifting economy. Most of the work I do is already based on not being paid for it. I do it because I think it's the right thing to do. I review people's papers because they review mine. I give guest lectures when people invite me because they do it for me.’’ Other examples of this economy can be found in public, free information sharing or open source platforms. In this type of economy, the building of strong social relationships and the reciprocal gift-giving ensures no one in any community will go without, even if they don’t have goods or money to exchange.
Given our current day societies this sounds like a utopia. For one thing larger cities don’t have that sense of community that stimulates reciprocity, there is no social shame if we don’t even know our neighbours and live our own individual life. We are used to paying strangers to receive goods and services, with no social connection whatsoever in the transaction. However, Josh says he is not trying to make the case for one complete system that should replace the other. It is about the underlying behaviours of mankind that are naturally more inclined to such interactions and that make it clear we can live in a different way. In the same way he talks about cooperation.
“Humankind thrives on cooperation. Much different than most people think, we, and also many animals, have not achieved our success by competing with other individuals, but rather by cooperating as part of a group. There’s nobody in the world who can sustain themselves on their own.”
Individualism. Visual by Mavin Studio.Cooperation over competition
Studying the natural behavior of humans in different era’s makes it clear that we are fit for different systems, and the ones we are living in now have been forced and marketed upon us. ‘’Humankind thrives on cooperation. Much different than most people think, we, and also many animals, have not achieved our success by competing with other individuals, but rather by cooperating as part of a group. There's nobody in the world who can sustain themselves on their own,’’ Josh says.
The division of labour has only grown as our society expanded. ‘’We're more interdependent than ever. I couldn't clothe myself for example. To make this shirt I'm wearing now, it required cotton grown on one continent and with machinery made in another continent and then shipped here. In total, a huge number of people were involved. But even more so, the ideas behind it. We had to develop knowledge about soils, agronomy and metallurgy, to name a few. All the knowledge required to produce my shirt was produced by billions of people over thousands of years. No single human mind can ever comprehend the amount of knowledge that is required to meet our basic functions.’’
“And we have this bizarre story that we tell of individualism, where we’re each these self-sufficient entities that should be the unit of analysis in economics. It should be individual choice, which is truly ludicrous when the problems we face are obviously collective.”
Hence the need to cooperate. Even though we have organised our systems that indeed we can easily buy shirts and goods we need, it points out that we cannot solve immense issues on our own. ‘’I compare it to a cell in your body. A cell in your body relies on the trillions of other cells to process waste, to get energy, to survive. It can't survive independent of your body. A human can't survive independent of culture and of a society. And we have this bizarre story that we tell of individualism, where we're each these self-sufficient entities that should be the unit of analysis in economics. It should be individual choice, which is truly bizarre when the problems we face are obviously collective.’’ A problem like climate change requires an immense collective effort. Not of just a group of countries, not an international cooperation bloc; it requires literally every country in the world. Our seemingly unsurmountable differences and hostilities, painfully visible in the divided and war ridden world of today, makes this a daunting task.
‘’Yes, today we still have these very old political leaders who are engaged in this kind of real realpolitik; not based on moral principles. There's a failure to recognize that we live in a world where cooperation is key. It used to be that for example Germany would start World War Two and takes off to capture all the oil fields and energy sources. If Germany gets the oil, somebody else doesn't and vice versa: it’s a zero sum game. We now live in a world where what we need to do is capture more solar energy. And no matter how much we capture here in the US. it doesn't leave any less for you in the Netherlands. And what's required to capture it, is knowledge, which improves through use. Knowledge is one of these things that it's just the more you use it, the better it gets.’’
Josh acknowledges that building cooperation is tough. ‘’People don't naturally cooperate with people they don't identify as part of their group. But when one person does something nice to another person, or even when one nation does something nice to another nation, we have this “click-whir“ automatic response of wanting to reciprocate. Sharing our knowledge, combining forces, to develop technology or inventions to address these problems would be key. But we don’t have any leaders who are going to do that.’’
Josh thinks universities can have a huge role to play to get that ball rolling. Creating a transnational network where knowledge required for solving our issues for free is one of his proposals. ‘’The academics themselves work fine together, I have Iranian and Russian colleagues and we work fine together. It’s usually the politicians and leaders that conflict.’’ ‘’I don't believe technological solutions will solve everything, but they can certainly contribute. And once we start that ball rolling, making the knowledge free, I think other countries say, wow, you know, this is cooperation in action, we're better off as a result of it.’’
‘’People always talk about how we need a resilient system, we need to be able to bounce back. But I think we've passed critical ecological thresholds; I don't think there's any bouncing back.’’ Recent reports about the world failing to meet the targeted maximum temperature rise of 1.5 degrees and that irreversible damage is done, point to this. ‘’What we need is an anti-fragile system, a system that's strengthened by shocks. And I think cooperation is the ultimate in anti-fragile systems: the more you use it, the stronger it gets. If we use it to address the problem of creating the technologies that can help us get on a degrowth path to a sustainable future.’’
The problem with market economy is that inventions used for tackling these global problems, get a monetary value. ‘’Say I develop some clean source of alternative energy that's decentralized and doesn't use rare earths. The more people that use it, the more valuable it is, the more I benefit. Perversely, we put prices on these things because we have this obsession that everything should be managed by markets. So, a new innovation like this alternative energy applies for a patent, which basically is a monopoly. So we're going to sell it at monopoly prices too high for some countries to afford. They're going to continue to burn fossil fuels. We're all worse off.’’
Part of a global ecosystem
All things considered, Josh advocates for a hybrid form of economic system. ‘’Part reciprocity economy, part capitalism/free market, and more parts. There’s also the public sphere, things that markets don't provide. We need to step in with collective action to provide roads, streetlights, national defence, things like ecological restoration as well. But what really is missing, in my view, is, the recognition that we are all part of a global ecosystem. We have this idea of ecosystem services, which is often defined as nature's benefits to people. For example, the 'provision' of a resource by an ecosystem to humans.’’ It’s easy to see how the mentality that nature provides us humans resources, has led to destructive exploitation of the earth’s resources.
‘’I think that’s totally the wrong way to think about it. In my view, we should be talking about nature's benefits to the biotic community (a group of interdependent organisms inhabiting the same region and interacting with each other) of which we are a part. We really have to start thinking about people's benefits to nature. And we can’t frame everything in monetary terms, where I want to go out and get as much oil from the Amazon as cheaply as possible. If I destroy the indigenous communities and local ecosystems, who cares, because the incentive is money. But if we really started thinking about nature as the source of amazingly invaluable gifts for which we must reciprocate, we would show deep respect for all we receive, take as little as we need rather than as much as want, cause as little damage as possible, and recognize our obligation to restore the damage we have already caused. I think we can start building that future. I'm talking about intentional cultural evolution, since the changes required are too urgent for natural selection to work. We need to really think collectively about the challenges we face and redesign our economy and our culture to solve these problems.’’
Overconsumption in the US. Visual by Mavin Studio.Culture change
A massive change in culture is required. The one that we are used to now, is so strongly embedded in our behaviour that it is hard to get rid of. ‘’Right now, our biggest corporations in the world are driven basically by Facebook, Amazon and Twitter. They're all driven by getting people to stay online, to be exposed to ads, to promote consumerism. We spend almost a trillion dollars a year promoting consumerism, (according to Statista) almost a thousand dollars per person on this planet trying to get people to buy more stuff. And as it turns out, as their research shows them, the way you keep people wedded to their computers, staying on Facebook, is by sowing controversy and promoting polarization. We're rewarding these corporations with obscene profits, which of course they use to influence legislation, and sell the most evil messages you could imagine. So, adding to the first point -needing cooperation – the second is that we need to end consumerism.’’
‘’The amount of stuff Americans buy is crazy. The size of our American houses has doubled in the last like 60 years. Everybody also now has storage facilities to put the stuff they can't keep in their house. And then we generate a ton of garbage per American per year of the crap we bought we don't want. And which then means we have to work like slaves to get all this money so that we can buy the crap we don't want. I really think we're sacrificing our wellbeing at the altar of overconsumption.’’
That acquiring stuff doesn’t provide happiness, seems clear. ‘’The US consumes 25 percent of the world's resources. If we walked around all the time with huge smiles on our face that we're so happy, maybe there's some justification for it. The fact is that we're actually stressed and miserable.’’ The US, as many other wealthy Western nations, has very high rates of people with depression, anxiety and other mental illness. ‘’I was at a party recently, for one of my Brazilian students. I was talking to the husband of my South African student who grew up in a small village of 200-300 people in Zimbabwe. I asked: do you notice the people in America are happier than the people in your village now that you are here? ‘No, not at all’, is what he replied. But due to advertising and their exposure to our lifestyle, he said they do want to be like us because they don't know the reality.’’
Always wanting more is not a natural feeling however, Josh believes. ‘’The first 250,000 years, we were hunter gatherers. If we accumulated more than we could carry, we couldn't follow our food supply, and we would starve. I actually think insatiability is taught. And we spend a fortune trying to teach people this. The huge burst in consumerism really comes about with the widespread use of TVs and advertising.’’ Opposed to business promoting buying stuff, the public sector could discourage it. ‘’The public sector could be educating people about the costs of consumption. When you buy a prescription medicine at the pharmacy, it has a little leaflet with all the negative effects. Maybe every time you buy anything at the store, it has to list all the negative effects.’’
The collective is stronger
Josh manages to be hopeful as he sees a lot of increased interest in ecological economics among students. ‘’Nowadays my students come from all around the world recognizing that these are the critical issues, and are eager to bring these ideas back. So I see an explosion of interest, also outside the university.’’ Focusing on the strengths of humans and what we are capable of if put to good, helps him relativize. ‘’I think that collectively we're so much stronger. One of our big problems is that we squabble too much among ourselves. I think Che Guevara referred to the American left as the circular firing squad: we waste a lot of ammunition on each other. Instead of competing, we should cooperate.’’
Learn more about Joshua Farley: uvm.edu/josh_farley
