Natureless Economists

Klimawandel mit Folgen: schmelzende Gletscher in Norwegen

Economic sciences are not the same as evolutionary theory. But why do we consider economy as nature given? We don't have to, says ecologocial economist Irene Schöne.

The US Supreme Court has stopped President Obama's climate protection plan following proceedings by 27 Republican-governed states and business associations. Majority leader in the US House of Representatives Kevin McCarthy called Obama's initiative an unlawful misuse of power and a risk to energy security and jobs. But there is even more at stake for the wider world, namely the maintenance of the Paris climate protection agreement signed by 195 countries in December 2015.

And there is much more behind this reaction than an attempt to stop an initiative by the political opposition. It is not only an unwillingness to recognise that climate change is happening, it is also an unwillingness to recognise that climate change is man-made.

Climate change – a natural phenomenon?

As such, it is not only an American problem. Again and again, when looking at the evidence of rising temperatures since the beginning of the Industrial Revolution and discussing possible countermeasures, it is argued that climate change is a natural phenomenon. It is said that the climate on this planet has already changed repeatedly over the last million years and because people always need to interfere with nature in order to ensure their own life, we cannot help but damage nature. Consequently, there is no point in worrying about why our industrialized form of economic actions have such repercussions, as there is no alternative. 

Also, a lot of people do not believe – especially in the United Kingdom, as shown by the Pew Research Center poll in Washington involving more than 45,000 participants in 40 countries -, that they would be affected by climate change. And this despite the huge floods caused by heavy rain in the UK over the last few years with repair bills amounting to billions of pounds sterling.

But even if the Paris agreement is accepted, we still have to ask ourselves the further question of whether combating climate change is not only the job of governments but has also to be practised by every citizen? What action can be taken is well known; however what we don't know is how many people really change their daily behaviour and reduce their emissions. 

Further more, the task of dealing with climate change is often left to physicists. Most people believe, that these problems have nothing to with our treatment of nature - and most certainly nothing to do with economics, the theory which legitimises our actions.

Limited and outdated view of nature

Today's form of economics is seen so normal to us, and we have spread it around the world to such an extent that we are used to regarding it as a natural rather than a culturally developed theory. And yet, we have transformed our mode of economics from direct exchange (natural economics) to mediated exchange via a means=money (cultural economics) to the point where the means is transformed into the end of all economic activity (economicult).

As long ago as 1898 the well-known US economist Thorstein Veblen wondered in his very readable essay (Why is Economics Not An Evolutionary Science?) at the fact that economists regard their ideas as an expression of the natural order and not of a certain cultural understanding at a specific time in history. And also, had this attitude prevailed in the natural science, the 20th century revolution in physics would never have been allowed to happen.

Furthermore, it is not only climate changing emissions which need to be reduced, if life as we know it, is to go on evolving on this planet. There is much more collateral damage caused by the industrialized treatment of nature we still consider as rational, such as the extinction of animal- and plant species, the deforesting of the tropical green lungs, rising sea levels and an exponential increase in the pollution of land, sea and air. Are we to disregard these threats to life and accept them, simply because they are treated by mainstream economists as natural? When globally 5.5 million people die prematurely from air pollution, according to researchers from British Columbia University (Die Welt, 14 February 2016), and in London nitrogen dioxide emissions exceeded the limits already in the first week of the New Year, are we supposed to put up with it, especially when researchers have discovered that annually 9,500 Londoners lose their life earlier than necessary because of pollution (The Guardian, 8 January 2016)? Because we are not able to change? Really, people who argue in such a way cannot expect to be taken seriously.

On the one hand economists regard their theoretical perception of nature as a realistic view, but on the other they concede that their theory contains a flaw because it seems to have forgotten nature. To heal this flaw they propose to define „intact nature“ as a fourth factor of production besides „land, labour and capital“, first defined in 1776 by the Scottish moral philosopher Adam Smith, the so-called „father“ of economics. They argue, that with this fourth factor the market model, i.e. the supply of goods and services and the demand for them, would be able to ensure the production of „intact nature“. By the market, not by nature itself. Quite remarkable.

However, we have to remind economists that mainstream theory has in fact not at all forgotten nature. The production factor „land“ is merely a different expression for nature, as already pointed out in 1944 by the Hungarian-American economist Karl Polanyi. The question is, whether the view that land=nature is only a factor which man can deal with as they fancy, is still appropriate for the 21st century.

Ecological modernisation of economics

Would it not make much more sense to develop a more rational modern understanding of nature with a less damaging impact on life? Asking such questions is not very popular, but as a scientist  one cannot dismiss them.

In economics nature is viewed as an external object, as a commodity, a resource, a raw material, a piece of real estate or an environmental medium, sometimes even as the „greenery“. These different views are convenient assumptions, but obviously neither accurate, nor sufficient. After all, human beings are part of nature. With every breath we take in nature and return the superfluous gas to the co-natural world (an expression coined by the German natural philospher Klaus-Michael Meyer-Abich). Even in the 18th century Adam Smith characterised man – 80 years before Charles Darwin – as a „natural animal“, an insight, economics conveniently neglects.

Instead of proceeding from an outdated and one-sided view of nature as a thing external to man, once created and never changed, over which man has domination, today it is more appropriate to extend this restrictive understanding and view man and the self-organised, evolving nature in a permanent process of reciprocal interaction.    

That way, economics can modernise its relationship with the co-natural world. And this way, it doesn't take an appeal to our ethical and moral values to achieve less damage, it needs „merely“ acknowledgement of the objective facts.With that acknowledgement too, we would overcome the belief that everything we do to nature is not effecting ourselves. 

Besides, doesn't such a modernised understanding of nature, mankind and the permanent reciprocal interaction between them correspond exactly to the term „ecology“, coined in 1866 by Ernst Haeckel, the German biologist and friend of Charles Darwin, in „Generelle Morphologie der Organismen“, where he defined ecology as the whole sphere of the organism's relationship with its external environment which, in a wider sense, can be deemed to include all conditions of existence?

Ergo, unless mainstream economics' outdated view of nature is modernised, ecologically modernised, there will be no solution to the environmental crisis.


This article will be published in Green Building eZine Issue Spring 2016.

Dr. Irene H. Schöne is an ecological economist. She co-founded the IOEW Institute for Ecological Economy Research in Berlin and was from 1998 to 2015 a Non-Executive Director of the UmweltBank AG in Nürnberg. Her latest book:

„FAIR ECONOMICS = Nature, Money And People Beyond Neoclassical Thinking“

has recently been published by Green Books, Cambridge/UK.