37

2
How Does It Work?
Putting the Economy in Its Place

A HAYFIELD WITH MULTIPLE species of grass, scattered blooms of wildflowers, and populations of field mice, voles, and songbirds sets the stage for a story of both economics and ecology: a story of how the economy works. If the hayfield is mowed in timely fashion when rain can be expected, it will regrow and can be cut a second time (in moderate climates) and still achieve additional regrowth before winter. The hayfield’s resilience depends on a critical variable, rain, because of the relationship of rain to other variables. Although mowing will affect their numbers, mice, voles, and songbirds will still be present, along with hawks, owls, and foxes that feed on them. The livestock fed by the hay, the farm family fed and supported by the livestock, the farmer’s customers and all the wildlife and grasses of the hayfield—all favor this state of affairs.

However, if the hayfield is cut too late or if no rains come, it may become a dusty field of stubble, with coarse invasive plants and saplings rapidly attempting to establish a different system. If things go well, though, eventually another system with its own integrity, resilience, and beauty will emerge. Or if severe erosion, salinization, or desiccation occurs, the field may remain bereft of life, or with only unhealthy communities.

38

Natural or minimally managed systems on which the economy depends are generally resilient as long as key variables, such as rain in the hayfield, stay within certain limits. Maintaining healthy systems first requires understanding how they work and what their limits are, and then requires care not to exceed those limits. This is a central principle on the path to a working, resilient, and ecologically coherent economy. Thinking about how the economy works only in conventional terms like supply and demand, market dynamics, financial incentives and the like, misses the big picture. The big picture starts with a basic scientific understanding of how the earth life systems on which the economy depends work, which has implications for both religion and ethics, which in turn give rise to a new sense of citizenship in the commonwealth of life. It ends with the realization that a merging of new understandings of science and ethics requires new thinking about key economic terms and about how the economy works.

Setting the Stage for Reframing the Economy

The activities characterized as “the economy” emerged within recent human history. The human species emerged from a long, historical context—that of biological evolution. Biological evolution emerged within the context of photosynthetic, biochemical, and metabolic processes. This complex of processes became established on the earth within the context of geochemical properties bathed in solar energy. The geochemical properties of the earth and its solar environment in turn emerged within the context and history of the universe. This is the heritage of the human economy, and the context from which a coherent understanding of how it works emerges.

The remarkable scientific developments of the last two centuries are almost entirely absent from the framework of contemporary economics. When science is taken into account, it becomes clear that the economy is embedded in human society, which is a subset of the commonwealth of all forms of life in the global ecosystem, which in turn is an island of life in a vast cosmos. In shifting from thinking about what the economy is for to thinking about how it works, seeing the economy as embedded in the global ecosystem and subject to the laws of the cosmos graphically illustrates how the economy can help preserve and enhance the integrity, resilience, and beauty of the commonwealth of life. Why is this important? The science that underlies the workings of life systems on the earth creates a powerful logic that, if applied, will pull the economy back from attempting to grow endlessly on a finite planet. The guiding ethic of right relationship that grows out of science establishes a new framework for understanding how the economy itself works.

39

A New Scientific Understanding Emerges

The new outlook has its roots in the scientific discoveries of the last five hundred years, particularly as they evolved in the nineteenth and twentieth centuries. Taken together, the advances in knowledge in cosmology, physics, and biology form the basis of an emerging understanding or story of humanity’s place in the cosmos and in the commonwealth of life.

The emerging cosmological and earth-process story may be said to begin in 1512, when Copernicus demonstrated that it was more plausible that the earth revolved around the sun than the other way around. In the seventeenth and eighteenth centuries, Newton, Kepler, and others demonstrated that the heavens work according to scientific laws that can be discovered by observation, experiment, and inference. They saw the fundamental workings of the universe in terms of locomotion—movement from one place to another—as exemplified in the orderly ellipses of the planets circling the sun.

In the nineteenth century, the discovery of the laws of thermodynamics, which describe changes in state, not just in place, significantly modified this view of a world based on motion. According to the first law of thermodynamics, energy and matter in a closed system can be neither created nor destroyed. This is the idea of the earth as a spaceship. According to the second law of thermodynamics, the entropy law, energy in a closed system is continually and irreversibly transformed from usable to nonreusable forms. This second law explains why highly ordered matter or energy has a natural tendency to become less ordered, as, for example, when a cube of sugar left sitting in a glass of water dissolves. Another aspect of the law states that it will take more energy to put a cube of sugar back together after it dissolves than the energy that was dissipated while the sugar was dissolving. The earth is one of many systems in the universe closed to matter and open to energy from the sun. We now know that the energy that flows from the sun to the earth makes possible virtually all life in all its forms and activities, but in so doing it is gradually and irreversibly dissipated beyond further use.

40

The next significant marker that now helps science define the new earth-process story was Charles Darwin’s Origin of Species. Darwin was the discoverer and Thomas Henry Huxley the defender of the theory of the origin of species through natural selection, which, in combination with the work of Gregor Mendel and others, ultimately became what we now call the theory of evolution. After Darwin, humanity’s origins were identified as being part of a vast and extremely long process of descent from earlier life forms, with modifications through environmental and sexual selection. Organisms that are better at attracting fertile mates and producing offspring with good survival skills are more likely to pass on their genetic traits. None of the additions and refinements to the theory of evolution and its scientific progeny has undercut the overall evolutionary model; they are merely elaborations of it. Indeed, the theory of evolution has been expanded to include the idea that life on the earth is an agent of change of the planet itself. As life evolves to different forms, it creates and modulates the presence of water, the composition of the atmosphere, the characteristics of the oceans, and the very rock of ages on which everything stands.

41

For a long time it was puzzling to see how evolutionary discoveries about the increasing complexity of life could be compatible with the second law of thermodynamics. Although entropy drives a natural tendency to dissipate energy and increase disorder, living organisms and ecosystems run in the opposite direction. They harness the steady flow of energy from the sun and make complex, life-sustaining structures that can create still more complexity.

Biodiversity—that is, the sum total of all life forms—because it is capable of discovering multiple pathways to order and complexity, creates life’s abundance. As complexity builds, the web of life also creates numerous interlinked pathways for energy to be dissipated. In the formation of the earth and in the development of its commonwealth of life, a continual process of emergence builds up “islands of complexity” in a “sea of entropy.” At the level of the organism, the islands of complexity go from microscopic bacteria to giant sequoias and blue whales. At the level of systems and social orders, complexity goes from vast bacterial mats or ant colonies to human economies to the entire interdependent commonwealth of life. Evolution, over the long run, leads to myriad life forms and complex structures, in seeming defiance of the second law of thermodynamics. The answer to why this happens lies in the ability of plants and all other life to harness and simultaneously continuously dissipate the continual stream of sunlight. The sun provides the energy for living things to drive upstream when entropy is pulling in the opposite direction.¹

The cosmos, therefore, clearly contains a generative process as well as a dissipative process. By influencing these contrasting trends toward complexity and disorder through economic activity and choices, we humans can exercise power to either advance or degrade the integrity, resilience, and beauty of the commonwealth of life. When human numbers on the earth were small, their economic activity, even if locally damaging, had little effect on the integrity of the planet’s life-support systems. Plant and animal life was vast and resilient, and human use of it often had a relatively benign effect on the global ecosystem’s overall functioning. But today, with nearly 7 billion people and high-energy technology pushing the economy to vastly expanded dimensions, the earth is in a period when the complex systems that life builds are being dismantled faster than they are being put together.

42

We are in a time of mass, human-caused extinctions that are occurring at a rate a thousand times faster than the normal background rate of species loss.² That means that a single life form out of millions—we human beings—are reducing and undercutting the diversity and structure of enormous numbers of entire living ecosystems that support biodiversity, retard erosion, filter pollution, and create more life, among many other things. As fossil fuels are consumed, our activities are decreasing the stock of stored sunlight and changing the climate and other background conditions that affect life’s prospects. Moreover, we are appropriating a growing share of the energy flow in general, as the world’s forests are depleted and as agriculture and aquaculture expand. All this activity not only leaves less for other species; it also destroys the ground on which they could, otherwise, rebuild their numbers. This ecological crisis is, in effect, an ecological holocaust.

But this is not the only way the human economy can relate to the planet. Our choices regarding economic governance, technology, ethics, and population size can promote either ecological degradation or ecological preservation and enhancement. The fundamental scientific discoveries that explain why the current economy is on a path toward ecological catastrophe also provide human society with the tools for building a whole earth economy. A significant roster of visionary scientists, economists, and religious thinkers are finding that the emerging cosmological and earth-process story provides a framework for building an economy that enhances life’s prospects.

For example, the collaboration of Brian Swimme (a mathematical cosmologist) and Thomas Berry (a theologian and historian of culture) has produced one of the best and most accessible narratives of this new vision, titled The Universe Story: From the Primordial Flaring Forth to the Ecozoic Era.³ Berry followed with the publication of The Great Work: Our Way into the Future,⁴ which spells out in detail how this “new story” provides a coherent context for the ecologically sound redevelopment of all our life-support and cultural systems.

43

Stuart Kauffman, a theoretical biologist, and his colleagues at the Santa Fe Institute are revealing the processes of emergence and patterns of relationship that run through energy analysis, information flow, earth science, biological processes, and economic and cultural systems.⁵ Biologists Lynn Margulis⁶ and evolutionary cosmologist Eric Chaisson⁷ have added brilliantly to the “new story” with their explanation of the deep context behind the way the natural and cultural systems of the world actually work.

Integrity and Resilience: Keys to Cosmic Evolution of Ecosystems

In 1869, the German biologist Ernst Haeckel coined the word “oecology,” from the Greek oecos, meaning house, or household. Haeckel was referring to the notion of the household as a place where numerous organisms live and interact. Ecology eventually emerged as a new science of studying nature’s household. The American ecologist Eugene P. Odum was primarily responsible for articulating, in the 1950s, that the ecosystem, or ecological system, is the primary unit of ecological analysis. The study of ecosystems is, therefore, the key to figuring out how to enhance biological diversity through proper care of land and water systems.

Before Odum, in the 1940s Aldo Leopold emphasized ecosystems’ integrity and stability. Scientists holding the reductionist view that ecosystems have no properties beyond those of the organisms that make them up initially criticized his focus on integrity. Now, however, scientists understand that the relationships among components of an ecosystem are essential in characterizing it. Others once objected that stability and finality are, in fact, not found in nature. All natural systems, they insisted, are characterized by change, not stability. This debate was resolved through the work of C. S. Holling and others in the closing decades of the twentieth century via the idea of ecological resilience. Ecosystems have functional ranges, defined by characteristics such as temperature, energy flow, species types, and populations. A system is considered to be resilient when it can rebound to its previous functional state after perturbation or disturbance. A nonresilient system is one that cannot rebound to the same or an analogous state. If it cannot rebound, it will likely find a new equilibrium at a lower state of complexity, as could happen to the hayfield at the beginning of this chapter.

44

The concept of resilience and its many well-examined examples in the real world also demonstrates that ecosystems have self-organizational properties of their own—and are not, therefore, reducible to their component parts. This reformulates Leopold’s idea of integrity: A system is healthy when its integrity is resilient. Clearly, if the economy is working in right relationship, a resilient commonwealth of life should be the primary outcome of human economic activity, as well as the primary guide to the moral reformation of economics.

An Emerging Integration of Science, Religion, and Ethics

To understand the extent and character of the current global wasting of the life-building systems on this planet, humanity must rediscover its place in the unfolding drama of the cosmos. More and more scientists, physicists, theologians, and practitioners of traditional belief systems are talking to each other with respect and openness, attempting to create a new, transcending, uniting, and empirically based synthesis of the experience of humans on the earth. Seeing the world in a new way offers a solid basis for a new, unifying guidance system.

45

For example, physicist Fritz Capra has long turned his expertise to the work of scientific and cultural integration.⁸ Indigenous teachers John Mohawk, Oren Lyons, and Jeannette Armstrong, among many others, have helped bring the wisdom and traditions of their peoples about how to live on the earth into broader cultural prominence.⁹ Mary Evelyn Tucker and John Grim of the Forum on Religion and Ecology¹⁰ have produced a ten-volume series that gathers historical and contemporary documentation on religious understanding of earth processes and the human–earth relationship. Michel Serres, a French philosopher of science, argues eloquently and passionately for seeing the earth holistically and calls for all peoples to join in a global action “contract” of balance and reciprocity with our common source of life.¹¹

Some Implications for Religion

Western civilization, even in its transplanted forms in Africa or the Far East, is in transition from an understanding of the world based primarily on biblical tradition or the traditions of one of the other organized religions in the world, to one informed increasingly by scientific learning about cosmic evolution and earth processes. Cultural transitions often entail serious cultural upheavals. The theologian Thomas Berry says that humanity is in trouble just now because the “Old Story” has become increasingly unbelievable and dysfunctional.¹² A “New Story” is emerging, but it has not yet become a widely recognized guidance system. Western civilization is consequently floundering in confusion about science, ethics, and religion. Collectively, we are lost. As a consequence, all the major religions are experiencing a resurgence in fundamentalist doctrines, belief, and behavior.

A new story offers all people, of any or no faith, the opportunity for a new kind of grounding that does not require them to turn away from the spiritual wellspring of their traditions. Once people begin to assimilate the new scientific understanding of the emergent cosmos and reconcile the human–earth relationship with their deepest beliefs, they will feel a sense of being connected to the deep unity with emergent, creative processes. This is a truly soulful experience, best described by the word “communion.” Communion with the purpose of all life is an experience that helps people enlarge their underlying beliefs and refine whatever ethical code currently guides them. In this experience, and in this work, people can gain a sense of co-creation—of playing out, along with the whole community of life, a significant engagement in the unfolding of the earth’s story as part of the unfolding universe.

46

Perhaps the most surprising aspect of the transition from the “Old Story” to the “New Story” is the way the new one transcends the ancient conflict between science and religion. Science is creating a narrative of relationship with regard to the earth and its living environment that is touching the human spirit and enlarging the human sense of morality and ethics. Religion in the West, though previously dominated by a human-centered cosmology and a map of divine intention, is becoming more open to new understandings and to inclusion of scientific discoveries that make literal interpretations of the “Old Story” unbelievable.

Pierre Teilhard de Chardin, a Catholic priest and paleontologist, is a key figure in this rapprochement of religion and science. With the publication of The Phenomenon of Man (1955), he set the stage for the next generation of religious thinkers and scientists to see the work of science as “revelatory” of a “new story” that encompasses cosmic, earth, and human narratives. No longer looking to theology for one kind of guidance and to science for another, scholars and researchers such as Thomas Berry, Brian Swimme, John Haught, George Ellis, Nancy Murphy, Ursula Goodenough, E. O. Wilson, and others are taking a new approach. This new approach, looking deeply into the cosmos, finds the human story, and, looking deeply into the human, finds the cosmic story. The earth’s history and process is the ground of emergence, complexity, and self-organization in which this narrative of relationship is revealed—which is to say, in plain language, the earth is the source and home of life’s great diversity and profound unity.

47

Swimme and Berry have contributed the concept of “cosmogenesis” to describe how life’s complexity unfolds and develops within the earth process. John Haught, a Catholic theologian and historian of religion and science (God After Darwin, Deeper Than Darwin, and Is Nature Enough?), has embraced the story of evolution as adding to the richness of religious narrative. George Ellis, a South African Quaker, mathematician, and prize-winning physicist (On the Moral Nature of the Universe, coauthored with Nancy Murphy), has become an international presence in the religion and science dialogue. The biologist Ursula Goodenough (The Sacred Depths of Nature) brings the aesthetic response to the world of natural forms and processes fully into alignment with scientific research and analysis. The sociobiologist E. O. Wilson (Consilience, On the Unity of Knowledge, Biophilia, and Creation: An Appeal to Save Life on Earth), while working as a scientific humanist, has spread such respect, care, and reverence for life throughout his work that he has come to be regarded as a kind of spiritual guide for the human– earth relationship.

The Dalai Lama (The Universe in a Single Atom) has been an active participant in the science and religion dialogue, with his particular interest in neuroscience and brain plasticity. He founded the Mind and Life Institute to help advance meditation’s contribution to neuroscience research. Starting in 2000 as the Philadelphia Center for Science and Religion, the Metanexus Institute has now become a worldwide network of scholars and scientists, with local chapters in forty-two countries. Metanexus participants generally share the conviction that not only dialogue, but also the active convergence of science and religion, is a much-needed path of world cultural development for human survival. These books and projects are but a sampling of the thought and work that characterizes the growing reconciliation of science and religion as well as the contribution that this cultural change is making to a new, holistic worldview.

48

Religions typically give prime importance to a reality greater than the individual self, a reality to which awe and respect, and sometimes even love or fear, is due. Guidance is sought and expected from this greater reality, which may or may not be conceived of as God, and which may encompass all of life, and even all that exists. This context and this range of relationships do not disappear with the emergence of the ecological perspective. Each person may reconfigure these experiences and relationships in different ways, but the common element that this new perspective brings into focus is the place of humanity in the cosmos and the way that we human beings all emerge from and are anchored to the great and good gift of the earth. Whatever traditions may inform individual practice, a basic framework of understanding can gather all people in the same “communion”:

• We are all part of the same cosmos.
• We live within the commonwealth of life, to which is due the same respect and reverence that we value for ourselves.
• Life’s task is to grow in compassion and in a way of living that is helpful to all life, and to the earth systems on which life depends.
• The consequences of failing to live in this sacred manner will diminish our own life value and the well-being of the whole earth community.

Some Implications for Ethics

Most ethical systems evolved and matured before the scientific revolutions of the last several centuries. New scientific understandings challenge or overturn many of those systems’ assumptions, especially about the nature of humanity and its place in the universe. As a result, most ethical codes provide “maps of the world” that are no longer very useful for figuring out where one really is. Building a whole earth economy requires rethinking the human place in the world by analyzing some of the key issues in ethics through the perspective of evolutionary biology, thermodynamics, and cosmology. Distributive justice and human rights are examples of ethical issues that make more sense when they account for the findings of science. If science and ethics can be brought together in a mutually enhancing way to provide convincing guidance for ecologically sound behavior, the human story may yet take a positive and more hopeful turn.

49

The work of two men in the first half of the twentieth century, Albert Schweitzer and Aldo Leopold, pioneered one way to deal with the ethical crisis that current belief systems have created on this planet, at least for Westerners. They endeavored, separately, to create an approach to ethics consistent with modern science, evolutionary biology in particular.¹³ They both moved ethics beyond the standard morality that is concerned only with humans. When brought together, their work provides an important synthesis that addresses one of the major weaknesses of modern ethical systems. Schweitzer emphasized duties to living beings that are not human, while Leopold emphasized human duties to biotic communities as whole systems.

Albert Schweitzer was an Alsatian physician and scholar whose life bridged the frontiers of science and religion. He observed that Western ethics got off on the wrong foot a long time ago because it focused on too narrow a question—what is the human good? The misstep in Western philosophy that ended up relegating the rest of the natural world to an afterthought was the basic idea that the key problem to be solved was the meaning of life in terms of our species alone. For Schweitzer, a rapprochement between ethics and the theory of evolution seemed essential. He found the key to this connection in the notion of “reverence for life,” the need to accord the same deep respect for the will to live in all other living beings that one recognizes in oneself.¹⁴ For him, the commandment to love your neighbor extended to cherishing and helping to both preserve and enhance life’s panorama in which you find yourself. With the experience of reverence for life, Schweitzer was thus able to reconcile his Christian ethics with evolutionary biology; Darwin’s picture hung above his desk.

50

Aldo Leopold undertook an intellectual and spiritual journey similar to Schweitzer’s. For many years an employee of the U.S. Forest Service, he founded the field of wildlife management. His farm in Wisconsin inspired what is one of the most influential works in conservation of the past century, A Sand County Almanac. Although the book is full of biblical references and allusions, Leopold does not depend on any explicit theological doctrine. He is especially critical of the directive to “subjugate” nature that has been traditionally read into the text of Genesis 1:28. To him, the human future depends on seeing land as a community to which people belong, not vice versa. The land itself is a being, in a sense, and we humans have a duty to love and respect it, and especially not to treat it as a commodity.¹⁵ For Leopold, the fundamental principle of ethics can be summarized as set out in this book’s introduction: “A thing is right when it tends to preserve the integrity, stability, and beauty of the biotic community. It is wrong when it tends otherwise.”¹⁶

Schweitzer and Leopold were rare Western voices attempting to instill a more holistic ethic of life into a human-centered cultural world. Schweitzer’s focus of ethics on the living individual of whatever species, and Leopold’s on the systems that make these individual beings possible, will not always yield the same results when applied to particular cases. Should the excess deer that are destroying the young oaks and maples in the forest be culled, or should they be left alone to find their own balance? These kinds of questions remain open in the space outlined by Leopold and Schweitzer. Both were acutely aware that living requires killing. Recognizing this, they turned their attention to how to live with respect and deference to the world around them. The fusion of Leopold’s and Schweitzer’s ethics helps provide a point of departure, an essential frame of reference for those searching for an enduring moral framework for the economy.

Both these writers and thinkers realized that what is needed in the world they lived in, the Western world, is a deep, widely shared experience of life’s unity and great beauty and of humanity’s critical role in cherishing, protecting, and enhancing the integrity, resilience, and beauty of all life and life communities. They both took a further step that makes them not simply interesting thinkers, but also spiritual guides to a higher ethical horizon. Their response to life’s intensity and to the great beauty of the living world crossed over into love and an impulse to deeply cherish, protect, and nourish individual lives, and also the great tapestry of interdependent life that encompasses the earth. This sense of love and connection is a motivational key. People will protect what they cherish and will nourish what they love. The question of developing a moral economy rests, in part, on whether a sufficient range of key persons find this deep spiritual communion and come together to establish a new ecologically and morally coherent “bottom line” for resource use and for the governance of the common good.

51

In fact, Schweitzer and Leopold are pioneers of rediscovery. They bring to the fore relationships and ethical guidance that have always been present among many traditional cultures, a number of which still exist in indigenous communities around the world. Their spiritual guidance also lives on in the subsequent work of holistic thinkers like Rachel Carson, whose book Silent Spring helped launch the modern environmental movement.

Citizenship in the Commonwealth of Life

A first step in building a whole earth economy involves identifying oneself, both individually and in community, as a citizen in the commonwealth life; Schweitzer and Leopold themselves did this. Humans, one tiny creature living in one tiny neighborhood of one of over a hundred billion galaxies, dwarfed in longevity by bristlecone pines and flummoxed by the engineering ingenuity of social insects, have for many centuries assumed the prerogative to sort out all aspects of the ecosphere in terms of what they think is worth caring for and what they thoughtlessly discard. Citizenship in the commonwealth of life will involve taking a fresh look at what has moral standing and at the duties that we humans have as commonwealth citizens. At its essence, this citizenship calls on each of us to consider the nature of the sacred and to ponder those things to which we owe reverence—is it human life only, or also other forms of life, even all other aspects of creation?

52

Everyone has duties not only to the individual people or animals that make up ecosystems but to ecosystems themselves. Interdependence is a key feature of the commonwealth of life. Reverence toward natural systems that support human and other life must take into account some knowledge of systems ecology. Modern knowledge of how ecosystems work gives rise to duties to the processes of which humans are a part. Citizenship in the commonwealth of life, then, includes the duty to be stewards of the entire planet—all its systems, all its life forms. If this feels good, all the better; the fact is, it is essential to human survival.

What happens when duties to ecosystems are not respected? The Sumerians founded one of the world’s first agricultural civilizations and left behind an almost completely degraded landscape. Ancient Greece denuded its own landscape of forests, then let animals overgraze the land, then overplanted its cash crop, olives, thus permanently impoverishing the soil and its ability to support the cities’ former web of life and civilization. It’s not hard to imagine a similar end to the story of the tar sands development that opened this book. It is high time to confront the entire range of ecologically unsound adaptations around which human societies are organized. For example, modern industrial agriculture, which devotes large sections of the earth’s land surface to poison-soaked monocultures and which actively repels nature’s biodiversity, is one of the first systems that needs to be rethought, rescaled, and restructured. Doing so will undoubtedly, in the long run, also entail scaling the human population more wisely within the ecosystems on which each group depends.

An enlightened view of personhood establishes the context for what it means to be a human citizen of the cosmos. We humans are not only products of the universe but agents of its complexity. Is our role in the earth’s life processes to be used in support of simplifying or adding complexity to that universe? If humanity as a whole is to succeed as a species, it must advance up the ethical ladder and develop values that reflect reality. These values are emergent systems, resting on other emergent properties, and, like them, the net result of almost 14 billion years of evolution. Indeed, the next ethical stage for humanity is to envision ourselves as custodians of the unfolding of the cosmos that is life on the earth.

53

An Ecological Update to Keynes’s Solution to Economic and Social Instability and Violence

The great English economist John Maynard Keynes devoted his professional life to studying how the economy works. He saw social stability as critically important for the human future. His life spanned the economic crises and catastrophic wars that dominated the first half of the twentieth century, upheavals that carried with them fears that the great advances of Western civilization would be completely lost. In responding to these crises, Keynes saw, correctly, that economic concepts and processes, and often the misunderstanding of their consequences, were a root source of social and economic unrest. In his prescient book The Economic Consequences of the Peace, he warned that the Versailles Treaty that brought an end to World War I would push Germany into economic chaos and large-scale unemployment, and would probably lead to the rise of a dictator and another war. As he saw his prediction coming true, Keynes set his hand to the writing of A General Theory of Employment, Interest and Money. This work provided the economic foundation for the sixty-year interlude of peace and prosperity that, for the most part, has characterized Europe and some other regions since World War II.

Keynes’s central insight was that classical economic theory of the time offered few tools for dealing with systematic unemployment— and thus was largely impotent with regard to heading off political and economic instability. The orthodox theory he challenged contained three postulates: (1) that the supply of goods would create its own demand for labor—by employing the workers that make them, (2) that all money was either spent or invested, and (3) that all unemployment was voluntary. Keynes rejected all three of these ideas. Industrial investment and activity, he said, could in fact stimulate employment, but at levels far below amounts that would employ the bulk of those seeking wages. He also noted that many holders of capital keep their money on the sidelines—in cash, thus providing insufficient investment. Lastly, he rejected the idea that all those who seek a job would find it even if their wage demands were dramatically cut. Under certain circumstances, economies so conceptualized could have high levels of employment, but that was not assured. He demonstrated that the economy could be in an underemployment equilibrium. Indeed, due to the cyclical nature of business activity, social instability would continue to be inevitable.

54

Keynes argued that classical economic theory, as characterized above, should be seen as a special case. He wished to replace this uneven, unfair, hit-or-miss pattern of economic and social benefits with a general theory of how the economy could work. A critical issue during economic downturns was to keep capital robustly deployed. To deal with the problems created by people hiding money in their mattresses (withholding it from circulation), Keynes formulated the idea of the liquidity trap: If investors were concerned that there was about to be a downturn, they, of course, would keep their money out of circulation. So the government had to find ways to assure the holders of capital that their investments would be both safe and rewarded.

For this purpose, Keynes turned to concepts of fiscal and monetary system management. Through managing the money supply and interest rates, investing in or reducing public works and increasing or limiting taxing and spending, government could help dampen the business cycle’s extremes. As is now generally seen as normal, in boom times the government would step in to restrain activity (thus avoiding inflationary spirals) by, for example, raising interest rates. In times of economic weakness, government would turn to its instruments of stimulation: lower interest rates, enhanced public works, and so on.

55

Today’s economists continue to debate which of these tools are the best, though they have by and large broken, in critical and unfortunate ways, with Keynes’s view of the economy as a means to social stability. His moral vision of what the economy is for—social stability and a good society—and of how it could work toward this end, has been warped into an engine of unlimited growth. His management tools for effecting countercyclical growth of the economy have come to be used as weapons to achieve continuous economic growth for its own sake. The principal dispute today among macroeconomic theorists is over the best way to achieve this constant growth—growth that is undercutting the integrity, stability, resilience, beauty, and even survival of the earth’s biotic communities.

Efficiency in a Whole Earth Economy

Keynes’s argument from the interwar period needs to be taken in a different direction. Keynes recognized the disruptive effects of large-scale unemployment in Europe and its tendency to spark wars. His corrective for the economy was aimed at stabilizing employment and forestalling violent disruption and social system collapse. The new aim should be broader, grounded in a concern for the current crisis facing the commonwealth of life. A whole earth economy, in addition to fostering social stability, also preserves and enhances the global ecosystem from which the commonwealth of life rises and which, in turn, it sustains. From this point of view, the stimulation of what Keynes called aggregate demand (overall demand)—the principal Keynesian tool for creating employment and thus achieving social stability—must be reevaluated from the perspective of its impact on life’s commonwealth.

56

Efficiency, according to this reevalution, means not only maximizing the satisfaction of human desires subject to constraints (the classic definition given in microeconomics), but also maximizing the products of life’s complexity gained, per unit of complexity lost. Or alternatively, efficiency can be used to mean a minimization of complexity lost for a given amount of complexity gained. But it is not just complexity alone that matters—a lake full of algae may be complex, in a sense, but it does not exhibit integrity, resilience, and beauty.

The overall standard of efficiency in a whole earth economy would be derived from the way in which the entire global community of life functions. Reverence for life and respect for every form of life requires that any differential treatment be gauged according to its effect on the integrity, resilience, and beauty of both the overall life-support system and those specific life-support systems that may be involved in economic decision making. Earth efficiency would be the goal of this new economy. Earth efficiency means that economic decision making should compromise life-support systems as little as possible.

In Beyond Growth, Herman Daly describes four kinds of efficiency that are refinements on the umbrella notion of “earth efficiency.” Service efficiency concerns the technical design of products and the way they perform. Maintenance efficiency is a measure of durability. Growth efficiency is the ability of ecosystems to replenish themselves. Ecosystem-service efficiency is the measure of how much the functions of ecosystems are disrupted when components are taken from them, or when pollutants are discharged into them. Each of these efficiencies defines a policy space in which people, local communities, nations, and the international community can adopt policies and formulate actions that modify and reduce human impact on life’s commonwealth. The overall goal is to reframe the way the economy works in order to satisfy the greatest amount of reasonable human needs and desires with the lowest possible cost to life.

57

A Whole Earth Economy

An economics for right relationship with the commonwealth of life—a whole earth economy—is built on a narrative that links science with religion and ethics. So far, we have seen that this narrative provides fresh answers to the question, “how does the economy work?” But two subsidiary questions remain: how should we think about wealth and capital, and how should we think about “waste”?

How a Whole Earth Economy Understands Wealth

In a whole earth economy, some common economic terms take on new meaning that reflects how the economy relates to the biosphere. In turn, the concept of wealth, which we now tend to think of in terms of money and what it can buy, also takes on a fundamental new sense. Wealth in a whole earth economy is not monetary wealth, but rather a share of the earth’s life and what supports it and keeps it going.

Budgets Normally, a budget refers to a flow of money—it is a record and often a projection of income and expenses. In a whole earth economy, the primary income is actually sunlight. Spending that sunlight wealth is a matter of using up life and other matter and energy. It’s important to remember that the earth’s capacity to support life, in part made possible by life itself, is limited but not fixed. Photosynthesis is the primary agent of transformation in support of life, and the primary limiting factors on it are, first, the ability to capture sunlight that is used to create the food, for example, that we humans consume, and to absorb or process the wastes that we throw back into the environment; and second, toxins, which, if allowed to build up in the ecosystem, will affect plants’ ability to survive and perform the photosynthesis that keeps us alive. Over the course of life’s earthly evolution, some 3.8 billion years, the budget of complexity-creating capacity has, for the most part, been in surplus. That means that life forms have been able to create more apples, more wildebeests, or more sardines than they need to survive, thus feeding other life forms. Substantial deficits occur from time to time, however, such as those associated with the mass extinctions we are now causing.

58

Comparative Advantage In a whole earth economy, comparative advantage means a country’s or region’s ability to transform and consume material and energy with the lowest draw on the earth’s life-support capacity. That would suggest that a country that produces goods to sell on the global market at the lowest cost to life’s budgets—not the lowest cost in terms of money alone—would become the one with the highest comparative advantage.

Cost In a whole earth economy, the cost of something is how much of the integrity, resilience, and beauty of the earth’s life-support systems must be exchanged to get it. The idea of costs and prices reflects the full cost to life, as measured by the use of net primary productivity (NPP), or other such measures of the earth’s life-support capacities.

(Re)Distribution Claims on shares of the earth’s budgets in a whole earth economy are not limited to persons, but can be made by and on behalf of life generally. Distributive justice in terms of distributing wealth—that is, the capacity to build life—therefore applies to the entire commonwealth of life.

Money In a whole earth economy, money, and its many surrogates like credit, is a socially sanctioned right to intervene, now or in the future, in the earth’s life-support budget—in essence, a license to exert an ecological cost by using up complexity or producing wastes and toxins. Inequalities in income and wealth give people various amounts of power over the earth’s complexity.

Production/Transformation The terms “production” and “transformation” normally describe processes of manufacturing or growing something that is useful. In a whole earth economy, there is no actual production of matter, only its transformation. All transformations are net entropic—which means that they increase disorder, or loss of complexity. The concept of “goods” is a partial illusion. All consumption causes a net increase in high-entropy matter or energy—which is what is termed waste.

59

Resources What we know as natural resources all play a role in natural systems that human use alters. For example, logging a tree removes habitat and changes ecosystem function; mining metals or tar sands uses up energy and contaminates the environment with substances from beneath the earth’s crust. Humanity is a product of evolution and cosmological processes but not their goal, and hence has no special privilege. The earth and the life on it should be looked at as the commonwealth of life—as the result of biological and cosmic evolution, not something made for humanity to use as we see fit.

How a Whole Earth Economy Deals with Waste

From the point of view of a whole earth economy, industrial processes should be analyzed in terms of their effects on the whole commonwealth of life. Industrial processes and waste must be reconceptualized, because there is no production as normally understood— only transformation. The key to applying this principle is to think of costs in terms of elimination of self-organizational capacity or the interference with recovery—as with toxins that impede life’s resilience, toxins released, say, in a manufacturing process. Every time something is made, a waste stream is created, and the energy used in that making process always declines in its ability to do work. Waste is the inability to do any more work to maintain self-organizational capacity.

Once the world’s interconnected ecological limits are accounted for, the internalization of materials, not their cost (as it is traditionally understood), becomes paramount.¹⁷ Karl-Henrik Robèrt and his colleagues in the Natural Step Movement in Sweden have formulated the basic principles involved in this approach to manufacturing and materials handling, and they are being used in scores of industries and countries around the world, the manufacturing giant Ikea being one of the main practitioners:¹⁸

• Materials from within the earth’s crust, the lithosphere, should not be allowed to accumulate systematically in the surface environment. Heavy metals like lead and cadmium are good examples of materials that must be sequestered to protect life.
• Materials from human society should not accumulate in the biosphere. Tens of thousands of human-made compounds are now accumulating in the biosphere. This is, in part, attributable to current economic systems and behavior. Since markets for many existing products are satiated, stimulating further consumption requires novelty to inspire consumers to buy the new item. Product innovation depends, in many sectors, on chemical engineering that introduces novel and insufficiently tested substances into the environment. Those who want to introduce new substances should have the burden of showing that their impact on life’s commonwealth would be benign; if they can’t, they should not be allowed to produce them.
• Society must not systematically deplete or degrade natural systems. For example, the ocean’s fish stocks should be kept abundant, forest cover kept intact, water and air kept unpolluted, and soil fertility maintained.
• As discussed in Chapter 4, people should not be subjected to conditions that systematically undermine their ability to meet their needs. This means, among other things, sufficient income, decent housing, meaningful work or other ways to contribute to society, access to education, adequate health care, and social opportunities for satisfying and nurturing relationships.

60

A wide variety of manufacturing companies and communities around the world have adopted the Natural Step program for several decades now without suffering any serious economic disadvantage.¹⁹ This is a prime example of the already growing whole earth economy.

61

Sewage provides a good example of how a new concept of waste would work in a whole earth economy. In most industrialized countries, sewage is regarded as something to be gotten rid of. Indeed, one of the most substantial advances in human health was brought about by keeping sewage segregated from water supplies, so there can be no quarreling with this outcome. Yet, if kept separate from chemical toxins, which is unfortunately not the case with sewage systems in North America (as only one example), pure sewage would not be real “waste” but an asset out of place. Sewage contains the results of photosynthesis. In its natural state, it is a resource that for centuries has been and still can be reinvested in the earth’s limited capacity for the production and sustenance of life.

The Path to a Whole Earth Economy

The open horizon of what Kenneth Boulding called the “cowboy economy” of the 1980s (that of the laissez-faire capitalists, the market fundamentalists) has changed to the limited horizon of the “spaceman economy.”²⁰ We are fortunate indeed that we have a narrative with which to reenvision the future, and a little time, as well as some of the conceptual tools needed to begin a fundamental rethinking. Yet this is just the very beginning. Questions of scale, equity, and governance are dealt with next.