An Economics For Spaceship Earth: A Time for Witness, and Time for Service: A Quaker’s Perspective

editors | 04 December, 2008 17:27

by Peter G. Brown, peter.g.brown@mcgill.ca

…I am tempted to call the open economy the “cowboy economy,” the cowboy being symbolic of the illimitable plains and also associated with reckless, exploitative, romantic, and violent behavior… The closed economy of the future might similarly be called the “spaceman” economy, in which the earth has become a single spaceship, without unlimited reservoirs of anything, … and in which, therefore, man must find his place in a cyclical ecological system which is capable of continuous reproduction of material form even though it cannot escape having inputs of energy.

—Kenneth E. Boulding, “The Economics of the Coming Spaceship Earth,” 1966.

Though Boulding’s (a member of the Society of Friends) challenge was nearly forty years ago the economics profession continues to marginalize those who seek to adopt his perspective. In the main the public remains uninformed, and even uninterested in thinking about—let alone seriously acting in a manner that fits the economy to the biosphere. We continue to be dedicated to infinite growth in a finite system. The current regime, the so-called Washington Consensus falsely claims to be value free at the same time it compels the world to accept a certain cultural, and therefore value based, framework for the future. We attempt to stimulate economic growth through fiscal and monetary policy, free trade, and decreased roles for government. It is based on indefensible assumptions that result in rising poverty and ecological destruction in many countries—and at the global level, for example climate change and decimation of fish species. Worse still, its principal architect, the United States systematically disregards the very agreements (such as reducing agricultural subsidies) that it often foists on other nations—contributing still more to poverty and ecological destruction, not to mention breach of trust.

What is now needed is an economics of stewardship, an economics dedicated to preserving and enhancing the commonwealth of life with which we share this planet. Ironically the very success of the current regime in bringing social stability to some societies is undermining the stability of the climate as well as the resilience of ecosystems around the world.

The Washington Consensus cannot offer satisfactory answers to five elementary questions. The first question is “what is the economy for?” In virtually every nation, the government aims at economic growth with high levels of employment and low inflation. But the growth element of this set of objectives is incoherent for a number of reasons. Here are four of them:

Questions an Economic System Must Address

1) What is the economy for?

In virtually every nation, the government aims at economic growth with high levels of employment and low inflation. But the growth element of this objective is incoherent for many reasons, including:

• Growth is not a measure of benefits, but a measure of overall economic activity. That we have more of it means only that we have more of it ‑‑ not that we are better off. Much economic growth creates negative side effects like pollution, but current measures don’t take this into account. Indeed, the money we spend to protect ourselves from pollution creates more growth—and hence appears as a benefit!

• Incomes can rise while wealth falls. If we cut trees income can rise during the cutting but the ability to sustain it falls after the trees are gone. This has especially tragic implications for poor countries whose economies are heavily dependent on natural resources.

• Growth contains no measure of distribution, so poverty and inequality can and do rise at the same time that overall economic activity increases. This is what is happening today in the United States, and to the global distribution of wealth and income.

• After certain basics needs are met, it is one’s relative wealth—how we compare to others, not the absolute amount of wealth we have that determines much of our self perception of happiness. In “advanced” societies trying to improve happiness through growth is thus a treadmill, since we cannot all be wealthier than each other.

2) How big should the economy be?

The second basic question is “how big should the economy be?” The Washington Consensus contains no measure of “enough”, no means of saying when growth has become uneconomic.

The current economic regime rests in significant measure on taking sunlight from the past that has been stored in fossil fuels, soils and forests and spending it on current consumption. It shifts many of the by-products of these activities to the future, from building up carbon dioxide in the atmosphere to the dispersion of heavy metals and persistent organic pollutants. We have not asked a simple question: how big should the economy be? As a result we continue to live beyond our means, laying waste the biosphere on which we and the rest of life depend in the process. Climate change alone is expected to exterminate a million species by 2100. We ignore the question: how much of the earth, how much photosynthesis may humanity—just one species among millions, legitimately appropriate. We have no principle of interspecies fairness.

3) What is a fair basis for sharing the fruits of an economy of proper scale?

A third basic question for which the current regime offers no satisfactory answer is: what is a fair share among humans of the fruits of an economy of proper scale?

As Boulding pointed out in 1975 “we have a two-deck spaceship.” Though many have increased their level of well-being since Boulding wrote hundreds of millions live in absolute poverty. The mainstream remedy for the lower decks --global poverty is more economic growth. But indiscriminate growth runs up against the scale constraint just discussed.

4) How does the economy work?

The fourth question for which the Washington Consensus has no satisfactory answer is “how does the economy work?” The current regime urges us to adopt free trade around the world, arguing that trade benefits all who participate in it. It is true that individuals who engage in exchange typically benefit ‑‑ otherwise they would not do it. And as David Ricardo pointed out nearly 200 years ago, nations that trade typically benefit because they have comparative advantages. If Britain is better at producing wool and Portugal wine, then each should concentrate on what they do best and exchange the surplus, to use Ricardo’s example. Prudent capitalists in Britain will invest in wool, while their Portuguese counterparts invest in wine.

This trade model works fine as long as capital (and other factors of production) stays in its home country, and this has lead to significant increases in income in many countries. But this immobility is no longer always the case. Now capital seeks its absolute advantage anywhere on the globe. However, some countries cannot hold capital—sub-Saharan Africa has many countries that have difficulty attracting and retaining capital. Others waste their natural capital, such as forests or fisheries, in trying to have something to exchange in global markets. These countries are marginalized, their futures impoverished as their resources become depleted or devastated. For example, the conversion of coastal mangrove swamps to shrimp farms destroys the breeding grounds for the fish that are part of the traditional fishery. But if the shrimp farms fail the mangrove swamp is not regenerated.

Moreover, the Washington Consensus has only recently paid attention to the institutional context necessary for the market to work. Economic reforms are often pushed without regard for building such institutions as property, contracts, courts, an educated populace, banks and constitutional regimes on which successful markets depend. The regime ignores, or at a minimum under-rewards, both natural and institutional capital.

5) How does the economy deal with waste?

A fifth basic question is “how should we think about waste?” Though there is widespread pollution in many countries, a basic aspirational principle of current economics is that the polluter should pay. This rests on the idea that if you cause harm you should have to pay for it.

But there are at least four reasons to doubt that this is the best way to look at the problem.

First, it is often difficult to calculate the monetary costs of pollution. For example, how much harm additional carbon dioxide in the atmosphere will do in changing the monsoons over India in a century is an analytically intractable question. Second, this principle conflates harms and wrongs: there are some things that we want to prohibit, early death for instance, and not just get compensated when they happen. Third, the polluter-pays principle concentrates the power of eminent domain in the hands of private industry: you can pollute my lungs as long as you are willing to pay for it. Fourth, the principle in question is entirely anthropocentric: assuming that it is only costs to humans that matter.

Stewardship Economics

Satisfactory answers to these five basic questions can, however, be provided by an economics based on stewardship. Stewardship economics begins by shifting the point of departure from humanity at the centre of the world to humanity as a member of the commonwealth of life. It takes modern science from Copernicus and Kepler to Darwin, Watson and Crick seriously, seeing us as members of an evolving community with which we share heritage and destiny. Here is how economics looks from this perspective:

1) What is the economy for?

The purpose of the economy expands beyond the goals of social stability implicit in the goals of high employment with low inflation, to a rough stability, or perhaps better resilience, of the biosphere itself.

2) How big should the economy be?

The economy is too small if it cannot supply the basic needs for housing, nutrition, basic medical care and the like for all its citizens, and too large when it systematically eradicates other life forms. The space in between is that of legitimate human wealth.

3) What is a minimum fair share?

Stewardship economics can embrace a concept of basic rights, to bodily integrity; moral, political, and religious choice, and adequate subsistence, as an account of minimum fairness among persons. It follows as a principle of stewardship of persons.

4) Trade and Stewardship

There is nothing in a stewardship perspective that argues against all trade, but it does put trade in another context: how can the trading regime be arranged to protect and improve the lot of the world’s desperately poor, and protect the biosphere? For example, we would locate farming to do the least ecological damage, and support local populations. There should be a presumption against moving goods long distances because of the resulting emissions of carbon and other compounds. Trade not only destabilizes planetary systems but local ecosystems as well. Shipping large amounts of water, for instance, typically reduces life support capacity at its source. We should think hard about University of British Columbia’s William Rees’ charge that trade is thermodynamic theft. For example, cutting trees in Indonesia and shipping the furniture made from the wood to the United States reduces the earth’s life support capacity since it dissembles the complex systems of the Indonesian Forest, as well as contributing to global warming.

5) Internalize Waste not Costs

From a stewardship perspective we are able to reframe the issue of waste along lines suggested by the group called the Natural Step. The policy goal should not be to ensure that the polluter pays, but rather to ensure that the material in the earth’s crust and the compounds produced by society do not accumulate in the biosphere (practices which are already being undertaken by some industries, and will be stimulated further by a new approach to chemical engineering called “green chemistry”).

Stewardship economics is not something dire or beyond our reach. It does mean revising our place in the world. Yet within a different framework many of the tools of the economics, such as differential interest rates, targeted ecological taxes, broad based consumption taxes, pollution trading regimes and the like can be deployed in the service of future life on this planet. But our generation has an unusual burden that goes beyond good habits and backing policies that support stewardship economics.

Now is a time for witness—for calling attention to the debacle of the present. The architects and beneficiaries of the global assault on the poor and life’s commonwealth in general brook no criticism, mainly control the mass media, and are embedded in a world of institutional corruption—often beyond even their own ken. In the affluent nations the public is largely uninformed and uninterested in the issues—though this is changing. Though, ironically, green consumerism may salve our consciences, but not end, and can perhaps even intensify, the unravelling of earth’s life support systems.

Now is a time for service-- to a higher calling of preserving and enhancing a flourishing earth. We are called upon to offer and implement a blueprint for a civilization worthy of respect. Stewardship economics is but one element in such a design, but it is a place to begin.   As George Fox, the founder of Quakerism, showed there are times when we need tools beyond friendly persuasion within the constraints of non-violence.

Kenneth E. Boulding, who taught economics at the University of Colorado was a vocal, yet exceptionally rare, critic of mainstream economics. He offered both witness and service. The economics profession itself offers few others like him. The impetus for the massive changes required will have to come, if they are to come from anywhere, from an informed and committed citizenry. Can our generation provide witness and service on behalf of spaceship earth?

Peter G. Brown (peter.g.brown@mcgill.ca), a member of Montreal Friends Meeting, is a professor at McGill University.   “Stewardship economics” is further developed in his latest book, Ethics, Economics and International Relations: Transparent Sovereignty in the Commonwealth of Life (Edinburgh). It is reprinted in Canada as The Commonwealth of Life: Economics for a Flourishing Earth (Black Rose). It is distributed in North America by Toronto University Press. His Restoring the Public Trust: A Fresh Vision for Progressive Government in America (Beacon) is available from the author. Under the auspices of the Quaker Institute for the Future he has served as the convenor for, and a principal author of, Right Relationship: Building a Whole Earth Economy to be published by Berrett-Koehler in January 2009. An earlier version of this article was published in Quaker Eco-Bulletin in 2004.

For Further Information
Kenneth Boulding, 1966. “Earth as a Spaceship” <http:// csf.colorado.edu/boulding/>
Peter Brown, 1994 Restoring the Public Trust: A Fresh Vision for Progressive Government in America. Available from the author <peter.g.brown@mcgill.ca>.
Peter Brown, 2000. Ethics, Economics and International Relations: Transparent Sovereignty in the Commonwealth of Life (Edinburgh), distributed in the United States by Columbia University Press and reprinted in Canada as The Commonwealth of Life: A Treatise on Stewardship Economics (Black Rose) distributed by Toronto University Press.
Herman E. Daly, 1996 Beyond Growth: The Economics of Sustainable Development, Boston: Beacon Press.
Wackernagel, M., et al. Tracking the Ecological Overshoot of the Human Economy. Proc. Natl. Acad. Sci. USA, 99 (14): 9266-9271, July 9, 2002. <www.pnas.org>