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How to fix a household crisis

Economics is a field in crisis. The failure to prevent or even predict the global financial meltdown is a sure sign of this fact. Over the last few decades, a number of body blows have dented the credibility of mainstream economists. But the utter failure to foresee the financial fiasco was like a Muhammad Ali knockout punch to the jaw. The crisis of credibility is due to the disconnect between what’s happening in the real world and what’s offered in the classroom and economics journals. For confirmation of the disconnect, witness the Dynamite Prize dished out by the Real-World Economics Review to “honor” those economists most responsible for blowing up the global economy.

Not to be outdone, ecology is also a field in crisis. This crisis, however, is not about credibility. Instead, ecology’s crisis stems from the seemingly insurmountable nature of the problems faced by its practitioners. Imagine going to work each day and having to confront mounds of malaise-inducing evidence of ecological decline, from species extinctions to habitat loss to climate destabilization (just to name a few). It’s a testament to their dedication that they even show up for work. Many who do show up tend to focus on localized problems or minor information gaps as entire ecological systems crumble around them. Who can blame them? It’s daunting and maybe even depressing to walk out on the tracks and try to stop a train that’s bearing down at full speed. So instead, they work on a small section of track, hoping to keep the train from derailing for a bit longer.

Wordsmiths will recognize that the names of these two crisis-riddled fields share a common root – oikos, the Greek word for household. So basically, our entire household is in a state of crisis, and it’s threatening the health of the family, the cat, the dog, the yard, and the whole neighborhood. When there’s a serious problem in your household, the best course of action is to figure out the cause of the problem, make a plan to address that cause, and take concrete steps to implement your plan.

Step 1 – Figure out the cause.

The cause of the crisis in our two “households” is the pursuit of perpetual economic growth. From the ecological perspective, the household cannot thrive if its support structure is always under pressure to provide increasing resources for a growing economy. Unsustainable liquidation of natural resources to produce ever more stuff is no way to run a household. From the economic perspective, the household will fall if it is built on a faulty financial foundation. In a financial system that requires exponential growth, claims on wealth (money) will inevitably surpass the availability of real wealth (actual goods and services), and a collapse is bound to follow. Societal commitment to growing a bigger economy, including the commitment to a financial system geared for such growth, is the root cause of the ecological and economic crisis.

Step 2 – Make a plan.

For their part, economists will have to recognize and accept the inevitable limits to growth, and get to work on the institutions and policies needed for a prosperous steady state. Ecologists will have to get more involved in economic affairs and be prepared to inform policy makers about the best scientific information on resource resilience. Such shifts within the disciplines of economics and ecology will require professors to teach different material, students to get a broader education, and practitioners to collaborate with one another. These are huge shifts that call for the two households to break down some walls and unite under one roof. Fortunately, Herman Daly, Robert Costanza, and plenty of other inspiring thinkers have given us a substantial start on building the combined household of ecological economics. There has been a tendency to think of ecological economics as a sub-discipline or specialty of economics, but that is entirely inadequate for addressing the root cause of the crises. We need to think of ecological economics as an evolution of the two disciplines – an integrative game-changer.

Step 3 – Take concrete steps.

Organizations that support ecological economics and the steady state are on the rise, but make no mistake – such groups can hardly be considered mainstream. CASSE is a tiny organization compared to the anachronistic Club for Growth. The U.S. Society for Ecological Economics doesn’t have the clout of the American Economic Association. Let’s make CASSE more influential than the Club for Growth. Let’s make the USSEE more influential that the AEA.

When we increase our members and solidify our base of support, we’ll have the political power to begin turning concepts from ecological economics into policies. Then we can commence the tough job of repairing our household. We’ll get the family into counseling. We’ll take the cat and dog to see the vet. We’ll tear up the ornamental grass in the yard, restore some habitat and plant a garden. Pretty soon the neighborhood will feel like a community shared by all who live there.

What do you think? Leave a comment below.

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