Friday, 28 April 2017

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?

File:The Blue Marble.jpg
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.

By User:Rursus (User:Rursus) [GFDL ( or CC-BY-SA-3.0 (], via Wikimedia Commons

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