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[Swarm-Modelling] Review: The wealth of nature: how mainstream economics
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Steve Railsback |
Subject: |
[Swarm-Modelling] Review: The wealth of nature: how mainstream economics has failed the environment. |
Date: |
Wed, 28 Jul 2004 17:14:41 -0700 |
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The economists and ecologists out there may find this review
interesting. I find it a little ironic that the book's criticisms could
just as well be leveled at mainstream ecology.
Steve Railsback
)))))))))))))))))))))))))))))
Ecology: Vol. 85, No. 6, pp. 1766–1767.
The Emperor Has No Clothes
Todd Wellnitza
aColorado State University, Biology Department, Fort Collins, Colorado
80523 E-mail: address@hidden
Nadeau, Robert L. 2003. The wealth of nature: how mainstream economics
has failed the environment. Columbia University Press, New York. xii +
253 p. $29.50 (cloth), ISBN 0-231-12798-7 (alk. paper); $29.50 (paper),
ISBN 0-231-12799-5 (alk. paper).
In essence, what Nadeau tells the reader of The wealth of nature is
this: neo-classical economic theory, the basis for mainstream economics
as it is presently understood and practiced, cannot solve our global
environmental problems because it is a sham. Its founders endowed their
discipline with ill-got legitimacy and false rigor by hijacking
equations from 17th century physics, replacing physical variables with
economic qualities, and fostering a discipline that quickly forgot its
bastard origins. Modern economics, therefore, is premised on an outmoded
cosmology based on Newtonian physics, not a modern understanding of how
the universe functions. This cosmology envisions a self-contained
universe comprised of autonomous parts, obeying intuitive laws, and
embedded within fixed frames of reference. The modern economist does not
realize, or is afraid to acknowledge, that this model is fundamentally
flawed—that parts (e.g., economic actors and organisms) are
interdependent and show complex behavior, that wholes (e.g., markets and
ecological communities) are open systems that respond readily to outside
influences, and that the accepted frame of reference (neo-classical
economic theory) is in desperate need of revision. To prevent
environmental catastrophe we must dismantle this antiquated and
dangerous version of reality with all possible speed. In its place we
must erect a new economic paradigm based on a clear-eyed understanding
of the part-whole relationship and a sobering acknowledgement that
complex systems, whether they be global markets or ecosystems, are
interconnected, idiosyncratic and unknowable.
Rather heavy stuff, this, but Nadeau pulls it off in just 223 pages
(minus introduction, notes, and index). “[A]n interdisciplinary scholar,
historian of science, and a professor at George Mason University,”
Robert Nadeau has a burly intellect and watching him flex is both
impressive and, at times, somewhat intimidating. With consummate skill
he surveys scientific disciplines ranging from ecosystem ecology to
quantum physics, and pulls out conceptual slabs from each to support his
contention that modern economics is not equipped to handle today's
problems. For example, he uses ecology to show that the emergent
properties exhibited by complex systems (e.g., markets or ecosystems)
can neither be understood by, nor predicted from, the properties of
their constituent parts, as conventional economics would have us
believe. Elsewhere he uses quantum physics to illustrate that
neo-classical economic theory fails to appreciate that descriptions of
reality (e.g., economic trends) cannot be viewed as objective and
independent from the observer; rather, the very act of observing can
change what is observed.
Although the breadth and depth of the author's knowledge is remarkable,
his writing style is not. Nadeau has a nasty propensity for complex
verbage. In his chapter entitled “A green thumb on the invisible hand,”
for example, Nadeau complains that market-based solutions to
environmental ills appear workable “only because assumptions about
part-whole relationships in economic reality implicit in the formalism
preclude the prospect that actual or real costs associated with damage
done to the environment by economic activities can be included in the
calculations.” Oftentimes his well-ordered sentences become so densely
worded that reaching a period became a minor intellectual achievement
and paragraph breaks were welcome respites. More than I would have
liked, understanding required concentrated effort and a second reading.
Despite the verbosity of much of The wealth of nature, Nadeau still
demonstrates some obvious strengths. Nadeau is at his best when
squeezing reams of complex information into tight summaries. Especially
good was Chapter 4, entitled “No free lunch,” in which he deftly reviews
the genesis of the global market economy, from the development of the
International Monetary Fund and World Bank in the closing days of WWII
to the formation of the World Trade Organization (WTO) at the end of the
century. He also makes insightful observations about recent events, such
as the collapse of Enron and the United States' failure to sign the
Kyoto Treaty limiting greenhouse gas emissions. Throughout these surveys
Nadeau stays on topic and faithfully returns to environmental concerns.
Writing about Enron, for example, Nadeau observes that
there has been no discussion thus far in print or the electronic
media of the fact that the core business of Enron was to make enormous
short-term profits by deregulating global markets for the exchange of
scarce natural resources without any concern whatsoever for the
long-term availability of those resources or the adverse environmental
impacts associated with their wholesale exploitation and use. Another
large something that seems to be conspicuously missing in the current
soul-searching public debate is that the vast majority of resources
traded by Enron were massively subsidized by taxpayers.
Excellent and stimulating summaries of evolutionary biology and quantum
physics also occur later in the book.
Disappointingly, Nadeau is less successful in exploring the historical
landscape to find where the early economists stumbled. I was expecting a
lively romp across familiar territory with forays into unknown hollows
and furtive glens. There we did go, but at a plodding trudge rather than
an invigorating hike. After only 25 pages I found my attention waning.
Nadeau is an impressive scholar, but he is too fastidious. He uses a
dental pick and forceps to uncover evidence when a hammer and chisel
would have done just fine. Although Nadeau does an admirable job of
gathering facts here, I wish he could have done so with a little more gusto.
I suspect the author's dense writing style and the book's slow start
will put off the casual reader, which is too bad because Nadeau rewards
the resolute. He has some good stuff to share, making The wealth of
nature well worth the read. The connections he makes between economics
and the natural sciences are as fascinating as they are inspired. His
ideas are unique, packed with substance, and bundled together with
persuasive arguments. He so pummels mainstream economics that by the
last chapters the reader is more than ready to learn what steps must be
taken in order to launch the New Paradigm, the economic theory that will
move environmental concerns front and center and save our planet from
growth-driven disaster.
Trouble is, Nadeau doesn't know what the steps are. He can tell us what
the New Paradigm will look like when it's built, but hasn't the foggiest
idea of where to start, much less a blueprint for building it. Granted,
developing new paradigms is difficult even under the best of
circumstances, but I still felt somewhat cheated. Nadeau implies that
there is a better way, and that he will get to it just as soon as he has
finished chipping away the scientific pretense that surrounds
neo-classical economics. In the end, however, there are only hopeful
allusions to what might be done and should be considered. We are left
feeling like a passenger on the Titanic who has just read an excellent
account of the vessel's design flaws and conceptual mistakes by an
author who, while quite good at times, is no shipwright.
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