Neoclassical and Ecological Economics: Bridging the Divide or Burning Bridges?

Neoclassical economics and ecological economics are two disciplines whose relationship seems less like two ships passing in the night, and much more like two ships sailing in different oceans in different centuries. From my experience some ecological economists tend to view the neoclassical discipline as some ancient creaking tub, just barely keeping afloat in a vast sea of contradictions and absurd assumptions; patching leaks with ever more arcane mathematics. In return, I would argue that many neoclassical economists likely do not even know that ecological economics has a boat at all, such is the disparity between the two in terms of size and influence. But are the two disciplines really so different? Having been involved now in several very different groups all practicing "economics" I am not so certain. Certainly, both groups have wildly different worldviews and are prone to constructing caricatures of each other, but I have noticed that despite the heavily implied cultural divide the practitioners can be remarkably similar. 

To illustrate this notion I will draw on my own experiences. As a member of the Economics for the Anthropocene program (E4A) and a doctoral student in York's Faculty of Environmental Studies, I am arguably situated in one of the most intensely heterodox environments anywhere. What is one of the things I have been working on recently? Deriving a version of the CES production function to account for some time-notion of input substitution; essentially very dry and very neoclassical theory. In my undergraduate, in a properly neoclassical department, I pursued and asked all sorts of inane questions concerning both the environment and economic theory and was hardly looked down upon for it. My self-percieved crowning achievement as an undergraduate student will likely always be asking a professor whether one could apply non-euclidean geometry to some bit of economics we were studying; a patently ridiculous question that nonetheless elicited an interesting conversation.

                                       

How I personally view all neoclassical economists... and how they likely view me

The point in mentioning these experiences is that they fly in the face of the strawman representations that we tend to measure our given economic tribe against. Quite simply heterodox economics is not just (paraphrasing a friend) the domain of non-rigorous Marxists, any more than neoclassical economics is the priesthood of market-fundamentalist neoliberals. Indeed the conflation of the actual practitioners of neoclassical economics with some vaguely defined hegemonic neo-liberal agenda is both unfair and for the most part untrue. The lion's share of professors in neoclassical departments I have encountered are quite content to pursue what is basically a branch of pure mathematics; furthermore, many of the ecological economists I am now affiliated with have their doctorates from neoclassical departments which have hardly prevented them from producing enormously novel work in the field of ecological economics. 

In terms of worldviews, the differences between the neoclassical and ecological schools are stark; the limits paradigm and the decoupling paradigm (for example) are not good bedfellows. Indeed, I am personally so horrified by the prospect of abrupt climate change and the Anthropocene in general that I think, at bare minimum, the whole economic paradigm requires rethinking. Yet, truthfully, when I sit down to work on economic modeling I find myself using many neoclassical mathematical methods and employing different but equally egregious simplifying assumptions to get my models "off the ground". Essentially, I engage in some of the very sins that are often attributed to neoclassical economists despite my general dislike and even disdain for some of the methods. Why might this be?

The famous Blue Marble. It is our home and also an absolute nightmare to model analytically

Simply put the earth-system, economies, cultures, etc are hugely complex systems that are incredibly difficult to model analytically. Putting them all together is great to achieve a holistic view of things but there is not likely ever to be enough computing power to generate a realistic analytical representation. As such modeling becomes reductionist regardless of whether modelers disavow the reductionist paradigm. Often the term reductionist is directed at neoclassical economics in a derogatory manner but this is a criticism that is equally leviable against work done in heterodox schools. Simply put it is the attempt to mathematize and formalize our thinking that leads to the issues; this is not something uniquely attributable to neoclassical economics alone. Formal methods, in any discipline, have their place; mathematics makes a good tool and a bad master.

So, given the existence of a few similarities, can bridges be built between the two disciplines? Will it be possible to reconcile some aspects of the two or will the two disciplines move onwards as largely separate entities with the occasional defections? Well, this will certainly be the case if only the high-level world views and perhaps political differences are ever brought to the discussion. Hope for some sort of cooperation or even dialogue between the two most likely exists at the less antagonistic methodological level. Ecological economists going in with scientific guns blaring almost certainly have a clearer view of the macro-scale physical problems afflicting us, but such a diplomatic strategy is unlikely to win many friends in more conservative neoclassical departments, and as such might result in ecological economics simply being shut out of any discussion. Economics teaching at the university level is dominated by the neoclassical approach, at some point (relatively soon) ecological economics must find a way to capture part of this undergraduate market to begin the enormous task of changing how economics is understood societally.

Perhaps, as did Shinto and Buddhism long ago, a syncretic union of ecological and neoclassical economics could come to exist.

Syncretism in action. Perhaps a shrine to Solow and Georgescu-Roegen would be appropriate?

Both disciplines have far too extensive a history to merely capitulate to the other (unlikely anyway) and such a co-existence could bring out the best in both disciplines. Ecological economics is a small discipline that will likely explode in importance as the Anthropocene, and its many attendant problems, come to public consciousness. Whether it should attempt to reconcile with neoclassical is, however, more unclear. Does methodological purity outweigh the possible gains to a larger audience? Given the increasingly small time available to make substantial changes does a strategy of adaptive compromise between the two disciplines hold any promise? I have no real insight into this but I am forced to wonder. 

I write this post in part because I think there is some possibility for bridging the two disciplines, even if it is only at the level of something like a symposium on methodologies. Ecological economists have developed a treasure trove of methods dealing with complexity, energy, and climate issues that could be of great use to neoclassical practitioners but often those methods are simply invisible behind the heterodox label. Likewise, some tremendously impressive innovations in statistical/econometric techniques, as well as mathematical models are generated by neoclassical scholars whom might be overlooked by virtue of being in the wrong academic tribe. There is perhaps much to gain through communication and much to lose through silence.

Or, ecological economists could just wholeheartedly throw their lot in with climate scientists and ecologists and prepare to duke it out with neoclassical over the heart and soul of economics. Which path is ultimately chosen is hard to say but the looming crisis facing us all sure does give impetus to figure out some strategy. Ecological economists can either try to bridge the divide with the neoclassical discipline or simply burn bridges, at somepoint however, the comfortable seperation of the two disciplines will likely have to end.

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On Thin (Sea) Ice: Some Thoughts on Ecological Economics, the Earth-System, and Storytelling

Anyone paying attention to the news over the last month may have heard of unusual things happening in the arctic. Even as the polar night was falling temperatures were recorded at times as being 20 degrees Celcius above historical averages. These ''anomalous'' temperatures naturally coincided with record low sea ice formation and indeed very brief spells of sea-ice decline during the very period when sea ice growth is expected. While sea ice decline and the general malaise of the arctic has been ongoing for some time it is numbers like 20 degrees that really hammer home the fact that change is happening and rapidly.

The Arctic and Antarctic can in some sense be considered the climate canaries in the coal mine. The poles, for a variety of reasons, are expected to warm more rapidly than the planet as a whole in a manner that is largely unstoppable due in part to the presence of a simple feedback process. As ice cover decreases there is a corresponding decrease in surface albedo (reflectivity) and  more solar energy is therefore absorbed. This additional absorption leads to more warming and hence additional ice cover loss. It is an elegant and frightening process that we a privileged enough to watch as the years go by. Unfortunately, there is potentially a hidden monster in the system in the form of methane and carbon held in arctic permafrost, which due to melting, has the possibility of being released in large quantities with rather dire implications. That we are on thin ice with certain components of the earth system, both in reality and in the metaphoric sense, is not a pleasant realization.

I have for some time now been fascinated with the functionings of the earth system. It is a wonderfully complex object of study, with numerous interlocked cycles, feedbacks, and fantastically complicated dynamics. The story of the earth-system is a deeply fascinating adventure through deep time starting with the Hadean eon 4.6 billion years ago. From this turbulent and violent beginning, one can move forward in time tracing the passage of eons and witness the incredible evolution and behaviors of the earth system. At times it has been far warmer than current, and at times it has been nearly entombed in ice and snow (snowball earth hypothesis); over time it has developed the oxygen rich atmosphere we have today. Throughout this grand narrative life has emerged, has been repeatedly challenged by mass-extinction events, and has returned to flourish anew. The earth system is unreservedly the most interesting thing I have ever studied.

 However, interest eventually begins to give way to feelings of existential dread as one understands that the earth-system can be vengeful when perturbed too quickly. The problems in the arctic mentioned in this post are simply a subset of a much larger list of issues affecting the earth-system; however, the news covering the spectacular and abnormal temperatures recorded there this past November brought home the reality of climate changfche to me in a way that few other news stories have. It struck home that time is perhaps not on our side. Rapid changes, in the geological sense, of the earth-system, have gone hand in hand with mass-extinction events. Today we live in a world undergoing profound environmental changes and unsurprisingly we are living through the sixth mass extinction event.

My main preoccupation as an ecological economist and indeed as a human living on the earth is the notion of the "closing window", by which I mean simply the increasingly small time frame to affect meaningful change in order to ameliorate the worst aspects of climate change. The image of the "closing window" is a powerfully evocative metaphor for earth-system processes that, once pushed past tipping points, become self-reinforcing and carry on regardless of whether we change our behavior. It provides a much-needed sense of urgency to processes that may at times seem abstract from our everyday lives. It was, as a matter of fact, this inescapable notion of a time limit that brought me to ecological economics in the first place.

In learning ecological economics we come to appreciate the simultaneously profound and obvious realization that the economy is a subsystem of the earth-system. In turn, it becomes starkly obvious that the exponential growth of our activities in this finite system must necessarily have deleterious impacts and that there are hard limits to growth as usually pursued. The problems of the earth-system today are in large problems brought about by humanity's desire to harness ever greater flows of materials and energy while simultaneously ignoring the problem of wastes. Eventually, something has to give, and that is precisely what we are beginning to see. From anomalous sea-ice behavior to the increasingly apparent signs that the sixth mass extinction is well underway, we are not lacking in signals and warnings signs.

Yet, despite the growing list of ominous warning signs, economic growth still largely inhabits the privileged position of goal above all others. Economic growth has become, in some sense, our societal religion with economists and politicians its clergy; it is almost universally beyond question (secular stagnation attains a darkly humorous interpretation when growth is understood in these terms). When the famous Limits to Growth was released in 1972 it was met with indifference and scorn from the established field of neoclassical economics. All these years later the idea of limitations to growth is essentially still a fringe proposition. At no time in my economics education did I encounter the concept and I cannot presume that modern economics education has changed drastically in the two years since I last studied the subject. Growth has become such a critical, and yet unquestioned, aspect of our society that it should not be surprising that many are incredulous of its limitations.

Ecological economics, now more than ever, has the unenviable and vast task of championing a position that is antithetical to the common narrative. That this task must now be taken in an age increasingly dominated by the metaphorical closing window is daunting, to say the least. The earth-system does not have any obligation to wait for us to get our act together and change our societal narrative.

I feel quite lucky to be a student in the E4A program; to be able to work with a diverse and inspiring group of graduate students on a substantial problem is not an opportunity many people get to have. I am also aware that the views of our little group are not perhaps representative of the much vaster majority. Challenging the narrative of perpetual growth will take many voices, and hopefully, from this chorus will emerge a different story about the future. This story, I would contend, must make the earth-system and all its complexities a central character. The human-earth relationship is highly complex and it is essential that we get it right; after all, the earth system at the end of the day is home. This is a fact that is too often forgotten and something that we must all work to bring to light, and in a timely manner I might add.