Putting and end to the Economy Vs. Environment myth. II. Three cheers for environmental Keynesianism

My intention is to voice my concerns and offer a suggested alternative approach.  As a biologist venturing outside my field of technical expertise I cannot promise that what I propose would work; however, I know that the current model is unsustainable (both environmentally and economically) and therefore it’s worth exploring and implementing alternative models.  In no way am I advocating a non-market economy. It’s not capitalism but consumerism which causes harm to the environment.  The creation of artificial needs for the sole purpose of creating a business and generating revenue does nothing for society.  Capitalism is amoral and makes no judgements on what is good.

Since the financial downturn that began in 2007, one of the most appealing has been the call for a program of environmental Keynesianism.  In the broadest of terms, one could define this as channeling public spending towards low-carbon industries and environmentally friendly activities.

Economic forces driving ecosystem degradation and biodiversity loss are extremely complex and present a multifaceted problem.  Socioeconomic institutions, including inter alia, market prices, capital flows, laws, political bodies as well as macroeconomic policies and structures favor expansion of the consumption-driven patterns of development.  They promote unsustainable resource consumption and degradation of ecosystems.  Sustainability has not been part of development plans; the environment has been treated as a virtually limitless source of resources and services.

The neo-classical economic perspective will find that incorrect prices for environmental services lead to environmental degradation; the Malthusian perspective will find population change is responsible; and from a Marxist perspective will find class structures to blame, and so on.  Although communism didn’t work there are lessons still to be learned from the works of Karl Marx; specifically government control.  Although capitalists will assert that government control causes market inefficiency, this does not mean it is the moral and socially acceptable policy.

Attention should focus on ways to compensate for “failures” in laws, policies, and organizations.  Policy failures can be due to two factors: perverse government policies that provide incentives for degradation or resource exploitation or when government policies and market institutions fail to incorporate environmental values, including the value of biodiversity into decision-making.  The latter is the focus of Environmental Keynesian which promises a “win-win” situation where the removal of harmful policy or introduction of interventions to compensate for market failures creates economic and environmental benefits for everyone.

The current system cannot be saved; unfortunately, this implies the unraveling of the very capitalist system.  I hope I highlighted the impossibility of capitalism in the long run and the necessity of facing up to the task of implementing alternative theories.  Humanity is heading towards unchartered waters and there is no way to square the circle of continuous growth in a finite world.  More radical thought is needed, we need socialized investment; it’s time to green the fingers of the invisible hand of the market!