Comments on: Ecological Economics: Money Matters, Mr. Daly

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By: Mark Rego-Monteiro

Mark Rego-Monteiro — Thu, 02 Dec 2010 14:40:27 +0000

Nadal certainly conveys his familiarity with value theory and money. However, his criticism of Daly indicates his lack of familiarity with the fundamentals of ecology, the biological science of ecosystems which underlie all economic activity.
Having spent years in professional work of social services and acitivism, I have completed my masters recently in mid-life with a highly practical orientation reflecting my own background in biology. Thus, while I agree that Daly and ecological economics has not integrated social relations sufficiently in their work, I also recognize that that is not their forte. Even more significantly, Nadal mentions only conventional economists, while concluding with a reference to the social relations underlying economic activity. Unfortunately, the excellent efforts that are being made in social economics are not even hinted at in this post’s discussion. Mark Lutz’s 1970s book with Ken Lux on Humanistic Economics was updated in 1999 as an excellent survey. Among other theorists and including Daly, he mentions David Ellerman’s work. Ellerman’s 2007 paper in the Review of Radical Political Economics available at his website represents a new breakthrough in the theoretical deconstruction of neoclassical assumptions of capital and firm dynamics, at the very heart of real, verifiable dynamics and the basis of the social relations in the economy.
Moreover, there is the real world of practical accomplishments which respond to conditions of real urgency at the consequences of behaviors by corporations and their executives mostly justified by orthodox economists. Non-profit group, civil society certifications like organics and Fair Trade are fundamental initiatives based on real world necessities, not theoretical and mathematical hoops jumping by academic theorists. These successful initiatives include such work as Anna Milford’s 2004 paper on Coffee Co-ops that employs co-op economics in an excellent treatment.
My background in biological anthropology and therapeutic psychology includes such work as Greg Bateson the interdisciplinary anthropologist. Many of us social scientists have strong descriptive and functional understandings of value creation through human activity and psychological motivation processes. I recommend looking at sociologist Georg Simmel’s use of anthropologist Eliot Chapple’s interaction theory.
Daly’s 1996 book Beyond Growth does great injustice and is seriously misinformed in two aspects: his neglect of indigenous populations in Brazil and the power balances in employer-employee relations. Ellerman’s work goes a long way to clarifying these dynamics, as does William Dugger’s work from 1989 and Warren Gramm’s work from the 1970s, along with JK Galbraith’s work on countervailing power.
Nevertheless, ecological economics by Daly and others is foundational and essential work. The ocean’s dead zones from pesticide and chemical washes are a good example and metaphor for Paul Hawken’s phrase, “You can’t make money on a dead planet.”"
I hope conventional economists will take a close look at Elinor Ostrom, an ISEE member, and her Riksbank Nobel winning work. My sources tell me that she has done plenty of field work, and thus serves as a reminder that most economists are masquerading as “scientists.” Most conventional ones are philosophers, and the many excellent environmental reports like the 2005 Millenium Ecosystem Assessment, yearly UNEP reports, and UNDP reports clearly remind those of us interested in references to reality that initiatives like Fair Trade are not figments of philosophical mathematics. They are the basis for realistic and grassroots formulations. Adam Smith needs to be reduced in status, and Robert Owen, Malthus, Marx, and John Stuart Mill raised, much as Daly et al have been doing.

By: Nancy Peters

Nancy Peters — Mon, 21 Jun 2010 10:21:41 +0000

I am an Economics student. I have tried to find some comment on the the Natural Capital Accounting ideas expressed in the 2002 publication ‘Not by Money Alone’ by Slesser and King, where they suggested that what is lacking is a physical method of quantifying the economy to parallel the monetary quantifications to be used in policy. They argue that energy units must be used as indicators to guide policy if development is ever to be “durable” – the term they propose to substitute for the degraded concept of “sustainability”. Has this been part of SSE thinking?

By: Anitra Nelson

Anitra Nelson — Thu, 29 Apr 2010 23:05:23 +0000

I wrote an article on this some time ago — Nelson A (2001) ‘The poverty of money: Marxian insights for ecological economists’, which was published in the journal Ecological Economics (36: 499–511). Taking a non-market socialist position and addressing the contemporary challenge of environmental crises I do not think that we can retain any form of monetary system and achieve either the ecologically rational use of resources or a fair social system. My arguments are laid out in brief at http://radicalnotes.com/content/view/74/39/ and in a broader way at the website — http://www.moneyfreezone.info Capitalism’s language and unit of measuring, monitoring, competing and assessing itself as well as other things is money in the form of interlinking national/international currencies. Capitalism is structured in such a way that growth is essential, the principles of degrowth contradicting capitalism in such essential ways that they point to another kind of system altogether…

By: jackinthegreen

jackinthegreen — Mon, 26 Apr 2010 14:03:21 +0000

Daly’s Response?

Money & the Steady State Economy: Historically Money has evolved through 3 phases..(DalyNews) http://bit.ly/ankPdU

By: Rob Dietz

Rob Dietz — Fri, 23 Apr 2010 21:09:38 +0000

As the director of the Center for the Advancement of the Steady State Economy (CASSE), it should be clear that I am committed to promoting Herman Daly’s vision of a sustainable and fair economy. That said, Professor Nadal is right to point out that the mechanics of a steady state economy have not been fully formulated, and the field of ecological economics has much developing yet to do. At CASSE, we are committed to those goals as well. As an example of that commitment, we are organizing a one-day conference in Leeds, UK this summer headlined by Peter Victor and Tim Jackson to address some of the questions surrounding the institutions and policies needed for a healthy but non-growing economy (details on this conference are available at http://steadystate.org/leeds2010/).

Regarding the connection between value and money in the economy, we are addressing this topic a bit in The Daly News. My most recent article can be found at the link below, and Herman will be posting an article that will be available Monday morning.
http://steadystate.org/money-is-a-cow/

Thank you,
Rob Dietz

By: Neva Goodwin

Neva Goodwin — Thu, 22 Apr 2010 19:53:21 +0000

I join in starting from recognition of Herman Daly’s enormous contributions; because of him it is not possible (and, of course, certainly not desirable) to go back to a mind-set that saw the economy as a free-standing system, or that assumed that market forces could induce substitutions for all resources. I also join in feeling some disappointments about Ecological Economics. For one thing, it has lagged in recognizing some of the critical issues of methodology. Too many of its adherents are ecologists who, without seeing how economic methods of analysis can skew results, have been willing to apply standard methodologies to the issues of interest to them. Pointing up which issues deserve attention is a valuable contribution; it is lessened when the issues are tackled with inappropriate methods.
On the subject of money – it’s remarkable how difficult it is to get this right. Mainstream economists has suffered from errors on both sides: sometimes assuming that the measuring rod of money could and should be applied to everything; at other times assuming a world in which money is perfectly transparent – not a potent actor. What we need is a theory that can, to start with, recognize when money is the best measuring rod, and when not. Beyond that, it also needs to take apart the complex subject of money, and recognize that it can have many different forms (local or alternative currencies; credit-card created debt; and fancy money-substitutes invented by those clever folks on Wall St.) – and that different forms of money are more, or less, appropriate, in different circumstances.

By: Herman Daly

Herman Daly — Wed, 21 Apr 2010 23:24:56 +0000

No doubt there are many areas that are inadequately developed in SSE. Probably money is one of them. However, we have been arguing for 100% reserve requirements for some time, following Frederick Soddy, Irving Fisher and Frank Knight. For a summary argument see “Money in the SSE” in CASSE web site next week.

Technical progress is something we try to induce or force by raising resource prices (while capturing the rents for redistribution). We hope for it, and try to incentivate it, but do not try to predict it, nor borrow against it in advance to justify present growth.