Coevolutionary Economics: The Economy, Society and the Environment
NATURAL RESOURCE MANAGEMENT AND POLICY Editors: Ariel Dinar Agriculture & Natural Resources Dept. The World Bank 1818 H Street, NW Washington, DC 20433 David Zilbennan Dept. of Agricultural and Resource Economics Univ. of California, Berkeley Berkeley, CA 94 720 EDITORIAL STATEMENT There is a growing awareness to the role that natural resources such as water, land, forests and environmental amenities play in our lives. There are many competing uses for natural resources, and society is challenged to manage them for improving social well being. Furthermore, there may be dire consequences to natural resources mismanagement. Renewable resources such as water, land and the environment are linked, and decisions made with regard to one may affect the others. Policy and management of natural resources now require interdisciplinary approach including natural and social sciences to correctly address our society preferences. This series provides a collection of works containing most recent findings on economics, management and policy of renewable biological resources such as water, land, crop protection, sustainable agriculture, technology, and environmental health. It incorporates modem thinking and techniques of economics and management. Books in this series will incorporate knowledge and models of natural phenomena with economics and managerial decision frameworks to assess alternative options for managing natural resources and environment. One of the most important issues in the study of natural resource systems is understanding of the evolution. This book makes a contribution in understanding the process through which food-providing natural resource systems are transformed from being utilized by hunting and gathering to provide food by farming and cultivation. Such transitions are accompanied by major institutional changes and are crucial stages in the evolution of civilization. We completed the transition to farming and cultivation of certain types of natural resources. However, we are in the midst of transition from "hunting to farming" in others. This book will provide a better understanding of analysis and management for such transition. Previously Published Books in the Series Russell, Clifford S. and Shogren, Jason F.: 1he Serres Editors Theory, Modeling and Experience in the Management of Nonpoint-Source Pollution Wilhite, Donald A.: Drought Assessment, Management, and Planning: Theory and Case Studies Spubler, Nicolas and Sabbaghi, Asghar: Economics of Water Resources: From Regulation to Privatization Rueth, Darrell L. and Furtan, William H.: Economics of Agricultural Crop Insurance: Theory and Evidence
Coevolutionary Economics: The Economy, Society and the Environment John M. Gowdy Rensselaer Polytechnic Institute... '' Springer Science+Business Media, LLC
Library of Congress Cataloging-in-Publication Data Gowdy, John M. Coevo1utionary economics : the economy, society, and the environment 1 John M. Gowdy. p. cm. -- (Natural resource management and policy) Includes bibliographical references and index. ISBN 978-90-481-5798-3 DOI 10.1007/978-94-015-8250-6 ISBN 978-94-015-8250-6 (ebook) 1. Evo1utionary economics. 2. Economic deve1opment--environmental aspects--history. 1. Title. II. Series. HB97.3.G68 1994 330--dc20 94-28210 CIP Copyright ~ 1994 by Springer Science+Business Media New York Orginally published by Kluwer Academic Publishers in 1994 Softcover reprint of the hardcover 1 st edition 1994 Ali rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+Business Media, LLC. Printed on acid-free paper.
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Contents List offigures Preface Acknowledgements 1X xi Xlll Chapter 1: Chapter 2: Chapter 3: Chapter 4: Chapter 5: Chapter 6: Chapter 7: Chapter 8: References Index The Economy, Economics and the Environment The Bioethics ofhunting and Gathering Societies Equality and Environmental Sustainability in Agricultural Societies Markets, Property Rights and Biodiversity Evolutionary Theory and Economic Theory Selection and Coevolution in Industrial Economies Economic Growth Versus the Environment Progress, Economy and Environment: Toward a Declining State 1 27 51 77 103 131 155 177 203 235 Vll
List of Figures Figure 1.1 Five Major Extinction Episodes in Earth's History 3 Figure 3.1 Lexicographic Ordering 64 Figure 4.1 Logistic Growth Cwve for a Biological Resource 82 Figure 4.2 Private Versus Social Cost ofharvesting a 85 Biological Resource Figure 4.3 Interdependence among Species 90 Figure 4.4 A Classification Tree for Five Imaginary Species 94 Figure 4.5 Economy-Environment Interactions 97 Figure 6.1 Classification ofeconomic Sorting 139 Figure 6.2 Hypothetical Input-Output Table ofdirect 142 Coefficients lx
Preface The subject matter of this volume is the human economy and its coevolutionary relationship with the natural world. This relationship is examined in three broad types of societies, hunter-gatherers, agriculturalists, and modem market economies. A growing body of scientific evidence has made it clear that the current human impact on the environment is far above a level that can be maintained without causing profound changes in the biophysical world to which we belong. The new fields of ecological economics and evolutionary economics can help us understand the relationship between the economy, society and the environment and may help us to formulate effective policies to manage these changes. The broad themes that unite the chapters that follow are coevolution, self-organization, punctuated equilibrium, and a critique of the notion of progress in economic and social history. The economic as well as the biological worlds are characterized by periods of stasis interrupted by periods of rapid change. Following the work being done in evolutionary biology, the implications of punctuated equilibria are examined in terms of economic processes. One of the major implications of the existence of punctuations is to challenge the notion of adaptation as a universal explanation of what exists at a particular point in time. An important contribution of the book is to present a system classifying selection processes in the economy. It is argued that selection for reasons of efficiency is only one of several reasons for firm survival. Following current work in evolutionary biology the notion of progress in human society is challenged. It is argued that the idea of progress should be replaced by the notion of non-directional change within a restricted set of possibilities. A major conclusion of the book is that the institution of the market economy is incompatible with ecological sustainability. There is a basic conflict between the self-organizing principles of markets and the self-organizing principles of ecosystems. The past ten years or so have been an exciting time for economists dissatisfied with the neoclassical theory of the firm which continues to dominate the discourse in economic theory. It is not the intent of this book to suggest that neoclassical economics be discarded. It is merely suggested that orthodox theory be relegated to the purpose XI
for which it was formulated, namely, to provide a basic model of market exchange. The problem with neoclassical theory is not so much with the model itselfbut with neoclassical economists who insist that it offers a universal explanation of human behavior. I believe, as do a growing number of economists, that we need a variety of approaches to study the vast array of economic and social institutions which human beings have constructed to solve the problem of making a living. Xl1
Acknowledgements Some of the material in this volume is based on articles appearing in the following journals: Evolutionary Economics, Environmental Conservation, Environmental Ethics, The International Journal of Social Economics, and The Review of Social Economy. I would especially like to thank the present and past editors of The Review of Social Economy (John Davis and William Waters) and the editor of The International Journal of Social Economics (John Conway O'Brien) for giving the economics profession rigorous and lively forums for the expression of non-orthodox economic opinion. I would also like to thank Lothar Scholz of the Institut fiir Wirtschaftsforschung in Munich and Clem Tisdell ofthe University of Queensland for the opportunity to visit their institutions and discuss many of the ideas presented in this volume. I would also like to thank my colleagues in the Department of Economics at Rensselaer, particularly the Chairman Don Vitaliano, for tolerating and even encouraging the expression of opinions which they did not always share. xiii
Coevolutionary Economics: The Economy, Society and the Environment