Economics, Ecology & Essentials

Wednesday 6th of October 2021
Squirrel on tree-trunk

It is some months since I have posted a blog. There are a number of reasons for this but one is that I have wanted to get to grips with the Review by Professor Sir Partha Dasgupta. (I can’t claim to have read the five hundred plus pages from cover to cover even so). Its title, The Economics of Biodiversity, gives no doubt as to where it is coming from, being focused on the science of economics. I confess that I have never felt totally comfortable with economics for a number of reasons.
Most generally, I have always found it a strange hybrid, because it sets out to use a broadly scientific approach, but is dealing very often with human constructs (not least money itself) and therefore human behaviour. These may be less amenable to clear-cut definitions or explanations and cannot always be reduced to mathematical formulae. More specifically, as regards the Dasgupta Review, my worry initially was that it is trying to fit nature into a specific box i.e. that of a resource we need to manage in a particular way to prevent it running out…
Quotations such as this one from the Review’s Preface tend to make a point in the same area: “Nature is more than a mere economic good. Nature nurtures and nourishes us, so we will think of assets as durable entities that not only have use value, but may also have intrinsic worth. Once we make that extension, the economics of biodiversity becomes a study in portfolio management.”
My sense is that this at least risks continuing to make the same mistake as humans have generally made up to now - we have treated the natural world for the last few hundred years as a resource for us to exploit or “a mere economic good” (and we have done so extremely effectively in many ways). Admittedly, we may not have done so until recently with a heightened awareness that it is finite and limited, but I lack confidence that moving from even that position to one in which we now focus on safeguarding or husbanding what we can exploit is sufficient of a shift at this time.
If nature only may have intrinsic worth and that worth only leads to “portfolio management” of “assets” (consciously using terms from economic activity, indeed the world of investment), aren’t we looking in the wrong direction? What comes to mind for me is a paraphrase of an idea used to try and suggest a sense of the greater good: ask not what nature can do for you - ask what you can do for nature. Or, to put it another way, can’t we look to nature to see what it can teach us about economics rather than looking to economics to see what it can teach us about nature?
Perhaps I am being rather hard on Professor Dasgupta and the key to this may be in the idea of his “target market”. He says in the Preface that he wants to be able to equip people to challenge economic approaches and the use of terminology. There is therefore a need to express this report in the terms used by economists. Another part to this is that there is an element of rhetoric in the report which perhaps connects with the “left-hemisphere” orientation I have previously talked about in wanting to come up with arguments which may help move someone from one position to another.
My starting point is probably different: I feel that there is a need to be far more “right-hemisphere”. However, even here and indeed even in the Preface I need to acknowledge that there are more right-hemisphere elements in what Professor Dasgupta writes. When he points to nature having qualities of mobility, silence and invisibility, these are at least partly attributes which Iain McGilchrist would associate with the right hemisphere in what he says about the left hemisphere preferring an idea of stasis or the “unvoiced” and implicit aspects of the right hemisphere. Similarly, when the Review talks much later about encouraging awe and wonder in school pupils through nature education (rather than "more conceptual knowledge”) it connects strongly with the ways in which Iain McGilchrist talks in The Master and His Emissary about experiencing nature in this way (e.g. when he talks about the nature poets of Romanticism).
It may well be that this type of report is performing a different function from my own preferred approach, as it starts with a left-hemisphere way of looking at nature and especially to how we can exploit it before moving to a far more right-hemisphere conclusion: “Biodiversity does not only have instrumental value, it also has intrinsic worth – perhaps even moral worth.”
Strangely, whilst in the process of writing this, I also came across something which perhaps touched on a another of my struggles with the subject of economics which is defined as follows: “economics is, after all, largely about greed, while other social sciences have to deal with more complex emotions.” (Paul Krugman was writing in The Guardian about Isaac Asimov’s Foundation trilogy, to which I may come back on another occasion).
Certainly, much of economics focuses on making our financial systems as effective as possible and some of that effectiveness has been focused on giving some people the best chance possible of amassing wealth. To take up Paul Krugman’s assessment in this particular context, to what level is greed part of our approach to the natural world? I’d say that it is hard to argue against that to the extent that some of our use of natural resources is definitely about an economic form of exploitation which will enable some people to become rich or at least richer. How much that is the motivation even in a single case of, say, mining lithium to make electric car batteries (i.e. an activity with a “green” element), is very difficult to know.
What I would say is that if our concern is solely or even primarily to maintain the natural world’s resources so that we can continue to enjoy the benefits of this for our own gain, we are not likely to be able to address our negative effects on the environment, global warming included.
Perhaps this is implicitly recognised in the very end of the Dasgupta Review: “Correct economic reasoning is entangled with our values … To detach Nature from economic reasoning is to imply that we consider ourselves to be external to Nature. The fault is not in economics; it lies in the way we have chosen to practise it.”
This seems to suggest that economics may have been “practised” as if it can be “value-free”. Perhaps this is the quarrel I have had with this field and maybe it is part of what Paul Krugman is referring to. Is there any sense in which the values of self-interest have been the default for economics as a whole without that ever being declared?
However, I don’t believe that this type of issue is only apparent within economics. What this suggests to me more broadly is that there may be “branches” of knowledge which have been pursued as if they are not connected back to the trunk and indeed roots of a tree (where, as it were, these values reside). If that is the case, perhaps in order for these areas of study to contribute solutions to climate change they may need to re-establish some types of connections. Perhaps what is contained in the Dasgupta Review can be a part of that movement.
However, there is still a part of me that remains sceptical about this possibility. What I am reminded of is something I read many years ago about the scientific method. My feeling was that the writer was so wedded to the scientific method that they resented the greater freedom of other people whose endeavours were not forced into this particular form. There is something of the same feel to me when Professor Dasgupta explains the need for economics to make predictions and models in quantitative terms. Is there any sense in which in economics or other fields of inquiry we struggle to change ways of thinking which have become established? Is there not a danger that if this is the case we as humans will fail to make the necessary changes for the rest of the Earth’s inhabitants to thrive?
It may be that certain forms of inquiry benefit from an ability to work, using Iain McGilchrist’s terms, from both left and right hemispheres. I have tried to think about what that might entail for economics, especially in this context of biodiversity. One idea is inherent in the original meaning of the word “economics” itself. The first part of the word is derived from the Greek word “oikos”, whose original meaning is “home”. If we take this idea of home, we could look at what it might entail to see the Earth as a home that we share with all the other forms of life. The loss of biodiversity mentioned in the Review suggests that we may not have had this as a major focus. Taking this even further, we as humans have the ability to create “home” for various forms of wildlife or plantlife, for example in re-wilding areas where farming practice or other changes in land use have made it more difficult or even impossible for those beings to subsist.
Acknowledging the Earth as “home” for all its inhabitants and not just humans or even more focusing on “home-making” for species other than our own is a long way from the terminology of resources, assets and portfolio management of modern economics, including in this Review. As a conclusion to this article, I would like to introduce some forms of thinking which perhaps push this difference even further.
The Review does make some acknowledgement of spiritual approaches to the natural world. Understandably, one of the issues which comes up in this context is the variety of these approaches. For instance, sometimes a particular type of animal or plant has sacred connotations within a particular tradition but this isn’t carried through into other traditions.
With the caveat that this is only one such approach, I want to share a thought from within the Christian tradition and link it with this sense of “home” from a spiritual viewpoint. Within the Christian tradition there is an idea of doing good to the “neighbour”. This is perhaps most dynamically illustrated through the story of a Samaritan who takes care of someone (from a different cultural and religious community). The story told by Jesus seems to suggest to whom we may be being challenged to be “neighbourly”. Is it too far to think this encouragement to take care of others may apply across species? That would certainly have numerous additional challenges, especially when it comes to our lives or livelihoods being apparently threatened by other species. I don’t pretend that this is an easy discussion, let alone that there is an easy course of action emerging from it. Within proposals around re-wilding, for example, there are often those who see this as going against their (economic) interests. Even more controversially, given we are still subject to a pandemic from coronavirus, how far can we take this in terms of things we can’t see i.e. at a microscopic level as well as those we can (this idea being complicated by the fact that there is much at this level that we need for our wellbeing or for plants to grow)?
Creating a financial system which is able to go any way towards something like I have just outlined would have to involve a huge turnaround in attitudes, beliefs and the practices which go with them. Although the Dasgupta Review does acknowledge in a number of places that we have to give up the idea that we can continue to increase financial activity without it having negative impacts on our physical environment, I would venture to suggest that we need to make such questions secondary to “home-making”.
I wonder if there is a parallel I can share, admittedly on a vastly smaller scale. In our family my wife is an expert gardener and I can’t even claim to be able to bask in reflected glory in what follows because it is her wisdom that I am sharing. More and more over the last few years we have tried to make our garden a home for various forms of wildlife, whether that be frogs that take refuge in the small pond when it is hot and dry or the undergrowth when it is wet or pollinators drawn to the nectar sources on offer. There are still plants we can enjoy, flowering and non-flowering, and fruit and vegetables that we can harvest, but the emphasis is now on the garden as an environment which welcomes and sustains a range of creatures.
I don’t know for how long it has been the case that our economy draws its identity or even its “raison d’être” from particular types of human need. In the pre-industrialisation era that would have been at a fairly basic level for the vast majority of the population, although there would have been an elite who had the wealth for luxury items. Over the last two or three hundred years we have evolved an economy which has re-vamped the idea of what is essential for those who have the money to spend to create new forms of mass consumption. The pandemic may have thrown into sharp relief some of these areas, but it has also shown us how difficult it is to not see them as “normal” and a return to “normality” in this sense as well as in other senses has been longed for and cherished.
Is it enough any more to think predominantly about these human needs in relation to our economy? If not, what is the alternative? What I personally think we need to strive for is developing areas of the economy which can both serve humanity and other parts of the natural world. For example, when we use building materials today, we tend to employ concrete, glass and steel for large constructions or brick or stone for smaller ones. If we were to return to the greater use of wood, I’m sure that would seem like a limitation. However, it could also encourage us to plant far more trees, knowing that they would be harvested at some point in the future, but in the interim they could act as a habitat for wildlife, at least if they were planted with that in mind and not just as a cash crop for construction. However, there is an appreciable time-lag until this could become a positive closed system, but I don’t believe that should discourage us from starting on this type of long-term project. (There are other more short-term benefits needed from other types of change, but part of this would be designed to change our economic systems, which it is difficult to do quickly, even if there is also a case for saying that this is necessary).
Part of the challenge with all of this is the time-lag between something becoming desirable or even necessary from a climate or environmental point of view and it becoming economically viable through the market alone. The Dasgupta Review is an attempt to allocate a more realistic cost to certain resources but I’m not sure that the market will move in that direction unless there are tariffs or taxes of some description which are added in order to give that sort of calculation a different nature. Part of the problem with this is that the capitalism of the last few decades has been one in which the dominant flavour has been diminishing regulation and dependence on a free market. Can a free market make the changes which are necessary to give us a radical change towards nature-friendly (ourselves included) policies? I have my doubts.
However, there is a danger that there could be such a gulf between our economic systems and any alternative to them that we feel collectively that the shift, however much we talk about the need for action on climate change, is too great. Is the Dasgupta Review enough of a bridge to encourage us to make sufficient change?
It may actually be that having a hybrid system in which the free market is heavily regulated does not work either. The energy market in the UK has been going through problems over the last few weeks. This has been very much affected by the fact that it is essential that people are not left without access to energy if their supplier can no longer continue (a supplier ceasing to trade has been the case on a number of occasions). I can’t help feeling that what is at issue at a deep level is that our economic systems make no distinction between what is essential and what is not. The market operates instead on the basis that it will supply whatever people are interested enough in buying to spend their money on that purchase. Having a way of cooking food is essential in a way that having a way of listening to the radio during preparation of that food is not, however much I may relish that as part of the experience. It would be much easier for us as a society as a whole to look at how our economic systems can help nurture the natural world if we focus on what is essential that is provided for us to live e.g. food, housing, heating/power. There are obviously many other things that we are so used to that it would be difficult to manage without them e.g. transportation, communication, entertainment. We probably need to look at a continuum which has some things on it which are essential at one end and others are placed further along it as they become less so. At the other end would be “luxuries”. However, what is placed where would vary from one person to another and indeed change according to different cultures. Regardless of that, I would suggest that if we are radically to transform the way these systems work in order better to support and even to prioritise the wellbeing of life-forms other than ourselves, we need equally to assess which are essential for our wellbeing and which are not.
The Dasgupta Review does suggest a radical overhaul of some aspects of our economic outlook, but I’m not sure it will lead to the degree of radical change which the necessity to address climate change and the crisis in biodiversity demands. Are we willing to challenge ourselves as to which of what we see as our own needs are essential and which are not? Sooner or later (and it needs to be sooner!) we have to ask ourselves that question.
Having said that, I want to finish with something more uplifting. I talked above about the needs that we have tended to integrate into our economic (and other) systems. It would be truest to say that there are perhaps other needs which have tended to be forgotten. Some of those became only too clear in the pandemic. A need for a strong connection with the natural world as a whole was one of those and it perhaps needs stating alongside this observation that this connection benefits most from a dynamic, thriving and complex set of ecosystems. However, a crisis in biodiversity is taking us in the opposite direction. We are perhaps more aware currently than ever of some of the needs which have been suppressed, because they have gone against our dominant (left-hemisphere) culture. It may be that if we are able to change the focus and shift the balance, not only will nature in general benefit, but human beings specifically will also do so, perhaps in ways that we cannot yet see or predict.