7. The Impasse of Economics
The triumph of Newtonian mechanics in the eighteenth and nineteenth centuries established physics as the prototype of a 'hard* science against which all other sciences were measured. The closer scientists cou'd come to emulating the methods of physics, and the more of its concepts they were able to use, the higher the standing of their discipline in the scientific community. In our century this tendency to model scientific concepts and theories after those of Newtonian physics has become a severe handicap in many fields, but more than anywhere else, perhaps, in the social sciences. (The social sciences deal with the social and cultural aspects af human behavior. They include the disciplines of economics, political science, sociology, social anthropology, and - in the view of many of its practitioners - history. ) These have been traditionally regarded as the 'softest' among the sciences, and social scientists have tried very hard to gain respectability by adopting the Cartesian paradigm and the methods of Newtonian physics. However, the Cartesian framework is often quite inappropriate for the phenomena they are describing, and consequently their models have become increasingly unrealistic. This is now especially apparent in economics.
Present-day economics is characterized by the fragmentary and reductionist approach that typifies most social sciences. Economists generally fail to recognize that the economy is merely one aspect of a whole ecological and social fabric; a living system composed of human beings in continual interaction with one another and with their natural resources, most of which are, in turn, living organisms. The basic error of the social sciences is to divide this fabric into fragments, assumed to be independent and to be dealt with in separate academic departments. Thus political scientists tend to neglect basic economic forces, while economists fail to incorporate social and political realities into their models. These fragmentary approaches are also reflected in government, in the split between social and economic policies and, especially in the United States, in the maze of congressional committees and subcommittees where these policies are discussed.
The fragmentation and compartmentalization in economics has been noted and criticized throughout its modern history. But at the same time those critical economists who wished to study economic phenomena as they actually existed, embedded within society and the ecosystem, and who therefore dissented from the narrow economic viewpoint, were virtually forced to place themselves outside of economic 'science,' thus saving the economics fraternity from dealingwith the issues their critics raised. Forexample, Max Weber, the nineteenth-century critic of capitalism, is generally regarded as an economic historian; John Kenneth Galbraith and Robert Heilbroner are often thought of as sociologists; and Kenneth Boulding is referred to as a philosopher. Karl Marx, by contrast, refused to be called an economist and saw himself as a social critic, asserting that economists were merely apologists for the existing capitalist order. In fact, the term 'socialist' originally merely described those who did not accept the economists^ view of the world. More recently Hazel Henderson has continued this tradition by calling herself a futurist and subtitling one of her books 'The End of Economics.''
Another aspect of economic phenomena, crucially important but severely neglected by economists, is the economy's dynamic evolution. In their dynamic nature the phenomena described by economics differ profoundly from those covered by the natural sciences. Classical physics applies lo a well-defined and unchanging range of natural phenomena. Although it has to be replaced by quantum and relativistic physics beyond this range, the Newtonian model remains valid within the classical domain and continues to be an efficient theoretical basis for a large part of contemporary technology. Similarly, the concepts of biology apply to a reality that has changed very little over the centuries, although knowledge of biological phenomena has progressed considerably and much of the old Cartesian framework is now recognized as loo restrictive. But biological evolution tends to proceed over very long time spans and, in general, does not produce entirely new phenomena but rather advances through a continual reshuffling and recombination of a limited number of structures and functions.2
The evolution of economic patterns, by contrast, takes place at a much faster pace. An economy is a continually changing and evolving system, dependent on the changing ecological and social systems in which it is embedded. To understand it we need a conceptual framework that is also capable of change and continual adaptation to new situations. Such a framework is sadly lacking in the work of most contemporary economists, who are still fascinated by the absolute rigor of the Cartesian paradigm and the elegance of Newtonian models, and so are increasingly out of touch with current economic realities.
The evolution of a society, including the evolution of its economic system, is closely linked to changes in the value system that underlies all its manifestations. The values a society lives by will determine its world view and religious institutions, its scientific enterprise and technology, and its political and economic arrangements. Once the collective set of values and goals has been expressed and codified, it will constitute the framework of the society's perceptions, insights, and choices for innovation and social adaptation. As the cultural value system changes - often in response to environmental challenges - new patterns of cultural evolution will emerge.
The study of values is thus of paramount importance for all social sciences; there can be no such thing as a 'value-free' social science. Social scientists who consider the question of values 'nonscientific' and think they are avoiding it are attempting the impossible. Any 'value-free' analysis, of social phenomena is based on the tacit assumption of an existing value system that is implicit in the selection and interpretation of data. By avoiding the issue of values, then, social scientists are not more scientific but, on the contrary, less scientific, because they neglect to state explicitly the assumptions underlying their theories. They are open to the Marxist critique that 'all social sciences are ideologies in disguise.'^
Economics is defined as the discipline dealing with the production, distribution, and consumption of wealth. It attempts to determine what is valuable at a given time by studying the relative exchange values of goods and services. Economics is therefore the most clearly value-dependent and normative among the social sciences. Its models and theories will always be based on a certain value system and on a certain view of human nature; on a body of assumptions that E. F. Schumacher calls 'meta-economics' because it is rarely included explicitly in contemporary economic thought.4 Schumacher has illustrated the value dependence of economics very eloquently by comparing two economic systems embodying entirely different values and goals.5 One is our present materialist system, in which the 'standard of living' is measured by the amount of annual consumption, and which therefore tries to achieve the maximum consumption along with an optimal pattern of production. The other is a system of Buddhist economics, based on the notions of "right livelihood' and the 'Middle Way,' in which the aim is to achieve a maximum of human well-being with an optimal pattern of consumption.
Contemporary economists, in a misguided attempt to provide their discipline with scientific rigor, have consistently avoided the issue of unstated values. Kenneth Boulding, speaking as president of the American Economic Association, has called this concerted attempt 'a monumentally unsuccessful exercise . . . which has preoccupied a whole generation of economists (indeed, several generations) with a dead end, to the almost total neglect of the major problems of our age.'6 The evasion of vatue-rclated issues has led economists to retreat to easier but less relevant problems, and to disguise value conflicts by using elaborate technical language. This trend is particularly strong in the United Slates, where there is now a widespread belief that all problems - economic, political, or social - have technical solutions. Thus industry and business hire armies of economists to prepare cost/benefit analyses that convert social and moral choices into pseudotechnical ones and thereby conceal value conflicts that can only be resolved politically.7
The only values appearing in current economic models are those that can be quantified by being assigned monetary weightings. This emphasis on quantification gives economics the appearance of an exact science. At the same time, however, it severely restricts the scope of economic theories by excluding qualitative distinctions that are crucial to understanding the ecological, social, and psychological dimensions of economic activity. For example, energy is measured only in kilowatts, regardless of its origins; no distinction is made between renewable and nonrenewable goods; and the social costs of production are added, incomprehensibly, as positive contributions to the gross national product. Furthermore, economists have completely disregarded psychological research on people's behavior as income earners, consumers, and investors because the results of such research cannot be integrated into the current quantitative analyses.8
The fragmentary approach of contemporary economists, then preference for abstract quantitative models, and their neglect of the economy's structural evolution, have resulted in a tremendous gap between theory and economic reality. In the Washington Post's, opinion, 'Ambitious economists elaborate elegant mathematical solutions to theoretical problems with little if any relevance to public issues.'4 Economics lo-day is in a profound conceptual crisis. The social and economic anomalies it can no longer address - global inflation and unemployment, maldistribution of wealth, and energy shortages, among others - are now painfully visible to everyone. The failure of the economic profession to come to terms with these problems is recognized by an increasingly skeptical public, by scientists from other disciplines, and by economists themselves.
Opinion polls taken during the 1970s have consistently shown a drastic decline in the American public's confidence in its business institutions. Thus the percentage of people who believe that major companies have become too powerful rose to 75 in 1973; in 1974, 53 percent thought many major companies should be dismantled, and over half of the American citizenry wanted more federal regulation of utilities, insurance companies, and the oil, drug, and automobile industries.10
Attitudes are also shifting within the corporations. According to a study published in 1975 in the Harvard Business Review, 70 percent of the corporate executives questioned preferred the old ideologies of individualism, private property, and free enterprise, but 73 percent believed that these values would be superseded by collective models of problem-solving during the next ten years, and 60 percent thought such a collective orientation would be more effective in Finding solutions."11
And economists themselves are beginning to acknowledge that their discipline has reached an impasse. In 1971 Arthur Burns, then in the chair of the Federal Reserve Board, remarked that "the rules of economics are not working quite the way they used to,'12 and Milton Friedman, addressing the American Economic Association in 1972, was even more frank:'[ believe that we economists in recent years have done vast harm - to society at large and to our profession in particular - by claiming more than we can deliver.'13 By 1978 the tone had changed from caution to despair when Treasury Secretary Michael Blumenthal declared: I really think the economics profession is close to bankruptcy in understanding the present situation, before or after the fact.'14 Juanita Kreps, outgoing Secretary of Commerce in 1979, said flatly that she found it impossible logo back to her old job as professor of economics at Duke University, because 'I would not know what to teach.'15
The current mismanagement of our economy calls into question the basic concepts of contemporary economic thought. Most economists, although acutely aware of the current state of crisis, still believe that solutions to our problems can be found within the existing theoretical framework. This framework, however, is based on concepts and variables that originated several hundred years ago and have been hopelessly outdated by social and technological changes. What economists need to do most urgently is reevaluate their entire conceptual foundation and redesign their basic models and theories accordingly. The current economic crisis will be overcome only if economists are willing to participate in the paradigm shift that is now occurring in all fields. As in psychology and medicine, the shift from the Cartesian paradigm to a holistic and ecological vision will not make the new approaches any less scientific, but on the contrary will make them more consistent with recent developments in the natural sciences.
At the deepest level, reexamination of economic concepts and models needs to deal with the underlying value system and to recognize its relation to the cultural context. From such a perspective many of the current social and economic problems are seen to have their roots in the painful adjustments of individuals and institutions to the shifting values of our time.1& The emergence of economics as a separate discipline from philosophy and politics coincided with the emergence of Western Europe's sensate culture at the end of the Middle Ages. As this culture unfolded, it embodied in its social institutions the masculine, and 'yang-oriented' values that now dominate our society and form the basis of our economic system. Economics, with its basic focus on material wealth, is today the quintessential expression of sensate values.'7
Attitudes and activities that are highly valued in this system include material acquisition, expansion, competition, and an obsession with 'hard technology^ and 'hard science.' In overemphasizing these values, our society has encouraged the pursuit of goals that are both dangerous and unethical, and has institutionalized several of the sins known in Christianity as deadly - gluttony, pride, selfishness, and greed.
The value system that developed during the seventeenth and eighteenth centuries gradually replaced a coherent set of medieval values and attitudes - belief in the sacredness of the natural world; moral strictures against money-lending for interest, the requirement that prices should be 'just'; convictions that personal gain and hoarding should be discouraged, that work was for the use value of the group and the well-being of the soul, that trade was justified only to restore the group's sufficiency, and that all true rewards were in the next world. Until the sixteenth century there was no isolation of purely economic phenomena from the fabric of life. Throughout most of history food, clothing, shelter, and other basic resources were produced for use value and were distributed within tribes and groups on a reciprocal basis.18 A national system of markets is a relatively recent phenomenon that arose in seventeenth-century England and spread from there over the entire world, resulting in today's interlinked 'global marketplace.' Markets, of course, had existed since the Stone Age, but they were based on barter, not cash, and thus were bound to be local. Even early trading had little economic motivation but was more often a sacred and ceremonial activity related to kinship and family customs. For example, the Trobriand Islanders of the Southwest Pacific undertook circular voyages along sea-trading routes that stretched for thousands of miles, without significant profit, barter, or exchange motives. Their incentive was the etiquette and magic symbolism of carrying white seashell jewelry in one direction and red sea-shell ornaments in the other, so as to encircle their entire archipelago every ten years.19
Many archaic societies used money, including metal currencies, but these were for payment of taxes and salaries, not for general circulation. The motive of individual gain from economic activities was generally absent; the very idea of profit, let alone interest, was either inconceivable or banned. Economic organizations of great complexity, involving an elaborate division of labor, were operated entirely by the mechanism of storing and redistribution of common commodities, such as grain, as indeed were all systems of feudalism. Of course this did not preclude the age-old motives of power, domination, and exploitation, but the idea that human needs were boundless was generally not held before the Enlightenment.
An important principle in all early societies was that of 'house-holding,' the Greek oikonomia, which is the root of our modern term 'economics.' Private property was justified only to the extent that it served the welfare of all. Intact, the word 'private' comes from the Latin privare ('to deprive'), which shows the widespread ancient view that property was first and foremost communal. As societies moved from this communal, participatory viewpoint to more individualistic and self-assertive views, people no longer thought of private property as those goods that individuals deprived the gioup from using, but actually inverted the meaning of the term, holding that property should be private in the first place and that society should not deprive the individual without due process of law.
With the Scientific Revolution and the Enlightenment, critical reasoning, empiricism, and individualism became the dominant values, together with a secular and materialistic orientation that led to the production of worldly goods and luxuries, and to the manipulative mentality of the Industrial Age. The new customs and activities resulted in the creation of new social and political institutions and gave rise to a new academic pursuit: the theorizing about a set of specific economic activities - production, exchange, distribution, money-lending - which suddenly stood out in sharp relief and required not only description and explanation but also rationalization.
One of the most important consequences of the shift of values at the end of the Middle Ages was the rise of capitalism in the sixteenth and seventeenth centuries. The development of the capitalist mentality, according to an ingenious thesis by Max Weber, was closely related to the religious idea of a "calling/ which emerged with Martin Luther and the Reformation , together with the notion of a moral obligation to fulfill one's duty in worldly endeavors. This idea of a worldly calling projected religious behavior into the secular world. It was emphasized even more forcefully by the Puritan sects, which saw worldly activity and the material rewards resulting from industrious behavior as a sign of divine predestination. Thus arose the famous Protestant Work Ethic, in which hard, self-denying work and worldly success were equated with virtue. On the other hand, the Puritans abhorred all but the most frugal consumption, and consequently the accumulation of wealth was sanctioned, as long as it was combined with an industrious career. In Weber's theory these religious values and motives provided the essential emotional drive and energy for the rise and rapid development of capitalism.20
The Weberian tradition of criticizing economic activities on the basis of an analysis of their underlying values provided avenues for many later critics, among them Kenneth Bould-ing, Erich Fromm, and Barbara Ward.21 Continuing this tradition, but going to an even deeper level, the recent feminist critique of economic systems - both capitalist and Marxist - has focused on the patriarchal value system that underlies virtually all of today^s economies.22 The connection between patriarchal values and capitalism was pointed out in the nineteenth century by Friedrich Engels, and has been emphasized by succeeding generations of Marxists. For Engels, however, the oppression of women had its roots in the capitalist economic system and would come to an end with the overthrow of capitalism. What feminist critics arc pointing out forcefully today is that patriarchal attitudes are far older than capitalist economies and much more deeply ingrained in most societies. Indeed, the majority of socialist and revolutionary movements exhibit an overwhelming male bias, promoting social revolutions that leave male leadership and control essentially untouched.23
During the sixteenth and seventeenth centuries, while the new values of individualism, property rights, and representative government led to the decline of the traditional feudal system and eroded the power of the aristocracy, the old economic order was still defended by theorists who believed that a nation's path to riches was in the accumulation of money through foreign trade. This theory was given the name 'mercantilism' later on. Its practitioners did not call themselves economists but were politicians, administrators, and merchants. They applied the ancient notion of economy - in the sense of managing a household - to the stale as the household of the ruler, and thus their policies became known as 'political economy.' This term remained in use until the twentieth century, when it was replaced by the modern term economics.
The mercantilist idea of the balance of trade - the belief that a nation will grow rich when its exports exceed its imports - became a central concept of subsequent economic thought. It was undoubtedly influenced by the concept of equilibrium in Newtonian mechanics and was quite consistent with the limited world views of the insular, sparsely populated monarchies of its time. But today, in our overpopulated and tightly interdependent world, it is evident that not all nations can win simultaneously at the mercantilist game. The fact that many nations - most recently, notably, Japan - still attempt to maintain trade balances in their favor is bound to lead to trade wars, depressions, and international conflict.
Modern economics, strictly speaking, is a little over three hundred years old. It was founded in the seventeenth century by Sir William Petty, professor of anatomy at Oxford and of music at London, as well as physician to the army of Oliver Cromwell. Among his circle of friends were Christopher Wren, the architect of many London landmarks, and Isaac Newton. Petty's Political Arithmeiick seemed to owe much to Newton and to Descartes, its method consisting of replacing words and arguments by numbers, weights, and measures, and 'to use only Arguments of Sense and to consider only such Causes as have visible Foundations in Nature.>24
In this and other works, Petty put forth a set of ideas that became indispensable ingredients of the theories of Adam Smith and other later economists. Among these ideas were the labor theory of value - adopted by Smith, Ricardo, and Marx - according to which the value of a product is derived only from the human labor required to produce it; and the distinction between price and value, which, in various formulations, has preoccupied economists ever since. Petty also expounded the notion of 'just wages,' described the advantages of the division of labor, and defined the concept of monopoly. He discussed the 'Newtonian' notions of the quantity of money and its velocity in circulation, which are still debated by the monetarist school today, and suggested public works as a remedy for unemployment, thus anticipating Keynes by more than two centuries. Today's economic policies, as they are debated in Washington-, Bonn, or London, would not be any surprise to Petty, except for the fact that they have changed so little.
Along with Petty and the mercantilists, John Locke helped lay the foundation stones of modern economics. He was the outstanding philosopher of the Enlightenment, and his ideas about psychological, social, and economic phenomena - strongly influenced by Descartes and Newton - became the core of eighteenth-century thought. Locke's atomistic theory of human society25 led him to the idea of a representative government whose function it was to safeguard individuals' rights to property and to the fruits of their labor. Locke held that once individuals created a government as the trustee of their rights, liberties, and property, its legitimacy depended on protecting these rights. If the government failed to do so, the people should have the power to dissolve it. A number of economic and political theories were influenced by these radical moral concepts of the Enlightenment. In economics, however, one of Locke's most innovative theories had to do with prices. Whereas Petty had held that prices and commodities should reflect justly the amount of labor they embodied, Lockecameup with the idea that prices were also determined objectively, by demand and supply. This not only liberated the merchants of the day from the moral law of 'just' prices; it also became another cornerstone of economics and was elevated to equal status with the laws of mechanics, where it stands even today in most economic analyses.
The law of supply and demand also fit perfectly with the new mathematics of Newton and Leibniz - the differential calculus - since economics was perceived as dealing with continuous variations of very small quantities which could be described most efficiently by this mathematical technique. This notion became the basis of subsequent efforts, to turn economics into an exact mathematical science. However, the problem was — and is - that the variables used in these mathematical models cannot be rigorously quantified but are defined on the basis of assumptions that often make the models quite unrealistic.
A distinct school of eighteenth-century thought that had a significant influence on classical economic theory, and notably on Adam Smith, was that of the French Physiocrats. These thinkers were the first to call themselves economists, to regard their theories as 'objectively' scientific, and to develop a complete view of the French economy as it existed just before the Revolution. Physiocracy meant 'the rule of nature" and the Physiocrats bitterly criticized mercantilism and the growth of cities. They claimed that only agriculture and the land were truly productive of real wealth, thus promoting an early 'ecological^ view. Their leader, like William Petty and John Locke, was a physician, Francois Quesnay, who was surgeon to the Royal Court. Quesnay expounded on the idea that Natural Law, if left unimpeded, would govern economic affairs for the greatest benefit of all. Thus the doctrine of laissez faire was introduced as another keystone of economics.
The period of 'classical political economy' was inaugurated in 1776, when Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations. Smith, a Scottish philosopher and friend of David Hume, was by far the most influential of all economists. His Wealth of Nations was the first full-scale treatise on economics and has been called 'in its ultimate results, probably the most important book that has ever been written.'26 Smith was not only influenced by the Physiocrats and the philosophers of the Enlightenment, but was also friendly with James Watt, the inventor of the steam engine, met Benjamin Franklin and probably Thomas Jefferson, and lived at a time when the Industrial Revolution had begun to change the face of Britain. When Smith wrote Wealth of Nations the transition from an agrarian, handicraft economy to one dominated by steam power and by machines operated in large factories and mills was well under way. The spinning jenny had been invented and machine looms were used in cotton factories employing up to three hundred workers. The new private enterprise, factories, and power-driven machinery shaped Smith's ideas, so that he enthusiastically advocated the social transformation of his time and criticized the remnants of the land-based feudal system.
Like most of the great classical economists, Adam Smith was not a specialist but a broad, imaginative thinker with many fresh insights. He set out to investigate how the wealth of a nation is increased and distributed - the basic theme of modern economics. In countering the mercantilist view that wealth is increased by foreign trade and by hoarding gold and silver bullion, Smith held that its true base is production resulting from human labor and natural resources. A, nation's wealth would depend on the percentage of its people engaged in such production and on their efficiency and skill. The basic means of increasing production was the division of labor. Smith contended, as Petty had before him. From the prevailing Newtonian idea of natural law Smith deduced that it was 'human nature to barter and exchange,' and he also thought it 'natural" that workers would gradually have to facilitate their work and improve their productivity with the help of labor-saving machinery. At the same time the early manufacturers had a much darker view of the role of machines; they well understood that machines could replace workers and thus could be used to keep them afraid and docile.27
From the Physiocrats Smith adopted the theme of laissez faire, which he immortalized in the metaphor of the Invisible Hand. According to Smith, the Invisible Hand of the market would guide the individual self-interest of all entrepreneurs, producers, and consumers for the harmonious betterment of all; 'betterment' being equated with the production of material wealth. In this way a social result would be achieved that was independent of individual intentions, and thus an objective science of economic activity was made possible.
Smith believed in the labor theory of value, but he also accepted the idea that prices would be determined in 'free' markets by the balancing effects of supply and demand. He based his economic theory on the Newtonian notions of equilibrium, laws of motion, and scientific objectivity. One of the difficulties in applying these mechanistic concepts to social phenomena was the lack of appreciation for the problem of friction. Because the phenomenon of friction is generally neglected in Newtonian mechanics, Smith imagined that the balancing mechanisms of the market would be almost instantaneous. He described their adjustments as 'prompt,' ^occurring soon,' and 'continual/ while prices were 'gravitating' in the proper direction. Small producers and small consumers would meet in the marketplace with equal power and information.
This idealistic picture underlies the 'competitive model' widely used by economists today. Its basic assumptions include perfect and free information for all participants in a market transaction; the belief that each buyer and seller in a market is small and has no influence on price; and the complete and instant mobility of displaced workers, natural resources, and machinery. All these conditions are violated in the vast majority of today's markets, yet most economists continue to use them as the basis of their theories. As Lucia Dunn, professor of economics at Northwestern University, describes the situation, 'They use these assumptions in their work almost unconsciously. In fact, in many economists' minds, they have ceased to be assumptions and have become a picture of how the world really is.
For international trade Smith developed the doctrine of comparative advantage, according to which each nation should excel in some types of production, the result being an international division of labor and free trade. This model of international free trade still underlies much of today's thinking on the global economy and is now producing its own set of social and environmental costs.29 Within a nation Smith thought that the self-balancing market system was one of slow and steady growth, with continually increasing demands for goods and labor. The idea of continual growth was adopted by succeeding generations of economists, who, paradoxically, continued to use mechanistic equilibrium assumptions while at the same time postulating continuing economic growth. Smith himself predicted that economic progress would eventually come to an end when the wealth of nations had been pushed to the natural limits of soil and climate, but unfortunately he thought this point was so far in the future that it was irrelevant to his theories.
Smith alluded to the idea of the growth of social and economic structures such as monopolies when he denounced people in the same trade who conspired to raise prices artificially, but he did not see the broad implications of such practices. The growth of these structures, and in particular of the class structure, was to become a central theme in Marx's economic analysis. Adam Smith justified capitalists' profits by arguing that they were needed to invest in more machines and factories for the common good. He noted the struggle between workers and employers and the efforts of both ^to interfere with the market,' but he never referred to the unequal power of workers and capitalists - a point that Marx would drive home with force.
When Smith wrote that workers and 'other inferior ranks of people' produced too many children which would cause wages to fall to the level of mere subsistence, he showed that his views of society were similar to those of other Enlightenment philosophers. Their educated middle-class status allowed them to conceive of radical ideas of equality, justice, and liberty, but did not allow them to extend these concepts to include the 'inferior classes'; nor did they ever include women.
At the beginning of the nineteenth century, economists began to systematize their discipline in an attempt to cast it into the form of a science. The first and most influential among these systematic economic thinkers was David Ricardo, a stockbroker who became a multi-millionaire at the age of thirty-five and then, after reading Wealth of Nations, devoted himself to the study of political economy. Ricardo built on the work of Adam Smith but defined a narrower scope for economics and thus began a process that would become characteristic of more subsequent non-Marxist economic thought. Ricardo's work contained very little social philosophy and instead introduced the concept of an 'economic model,' a logical system of postulates and laws, involving a limited number of variables, that could be used to describe and predict economic phenomena.
Central to the Ricardian system was the idea that progress would sooner or later come to an end because of the rising cost of growing food on a limited area of land. Underlying this ecological perspective was the gloomy view, evoked earlier by Thomas Malthus, that the population would increase faster than the food supply. Ricardo accepted the Malthusian principle but analyzed the situation in greater detail. He wrote that as the population increased, poorer marginal land would have to be cultivated. At the same time the relative value of the superior land would increase, and the higher rent charged for it would be a surplus received by the landlords for merely owning the land. This concept of 'marginal' land became the basis for today's economic schools of marginal analysis. Ricardo, like Smith, accepted the labor theory of value but, significantly, included in his definition of prices the cost of the labor required to build machines and factories. In his view the owner of a factory, in receiving profit, was taking something that labor had produced, a point upon which Marx built his theory of surplus value.
The systematic efforts of Ricardo and other classical economists consolidated economics into a set of dogmas that supported the existing class structure and countered all attempts at social improvement with the "scientific" argument that 'laws of nature' were operating and the poor were responsible for their own misfortune. At the same time, workers' uprisings were becoming frequent and the new body of economic thought engendered its own horrified critics long before Marx.
One well-meaning but unrealistic approach led to a long series of unworkable formulations known later as welfare economics. The proponents of this school shifted their focus from the earlier view of welfare as material production to the subjective criteria of individual pleasure and pain, constructing elaborate charts and curves based on *units of pleasure' and 'units of pain.' Vilfredo Pareto improved these rather crude schemes with his theory of optimality, based on the assumption that social welfare would be increased if the satisfaction of some individuals could be increased without decreasing that of others. In other words, any economic change that made someone 'better off without making anyone "worse ofP was desirable for social welfare. However, Pareto's theory still neglected the facts of unequal power, information, and income. Welfare economics has persisted to the present day, although it has been shown conclusively that individual preferences cannot be made to add up to social choice.30 Many contemporary critics see it as a thinly disguised excuse for selfish behavior that undermines any cohesive set of social goals and is now playing havoc with environmental policies.31
While welfare economists were constructing elaborate mathematical schemes, another school of reformers tried to counter the deficiencies of capitalism in frankly idealistic experiments. These Utopians set up factories and mills according to humanitarian principles - with reduced working hours, increased wages, recreation, insurance, and sometimes housing - founded workers' cooperatives, and promoted ethical, esthedc, and spiritual values. Many of these experiments were very successful for a while, but all of them ultimately failed, unable to survive in a hostile economic environment, Karl Marx, who owed much to the imagination of the Utopians, believed that their communities could not last, since they had not emerged 'organically' from the existing stage of material economic development. From the perspective of the 1980s, it seems that Marx may well have been right. Perhaps we had to wait until today's 'post-industrial' weariness with mass consumption and awareness of the mounting social and environmental costs, not to mention the diminishing resource base, to reach conditions in which the Utopians' dream of a cooperative-based, ecologically harmonious social order can become reality.
The greatest among the classical economic reformers was John Stuart Mill, who joined in the social criticism, having absorbed most of the work of the philosophers and economists of his time by the time he was thirteen. In 1848 he published his own Principles of Political Economy, a herculean reassessment that came to a radical conclusion. Economics, he wrote, had only one province - production and the scarcity of means. Distribution was not an economic but a political process. This narrowed the scope of political economy to a 'pure economics,' later to be called 'neoclassical,' and allowed a more detailed focus on the 'economic core process,' while excluding social and environmental variables in analogy to the controlled experiments of the physical sciences. After Mill, economics became split between the neoclassical, 'scientific,' and mathematical approach, on the one hand, and the 'art1 of broader social philosophy on the other. Eventually this split led to today's disastrous confusion between the two approaches, resulting in policy tools that are derived from abstract, unrealistic mathematical models.
John Stuart Mill meant well with his emphasis on the political nature of all economic distribution. His pointing out that the distribution of a society's wealth depended on the laws and customs of that society, which were very different in different cultures and ages, should have forced the issue of values back onto the agenda of political economy. Mill not only saw the ethical choices at the heart of economics, but was also keenly aware of their psychological and philosophical implications.
Anyone who seriously tries to understand the social condition of humankind has to deal with the thought of Karl Marx and will experience its continuing intellectual fascination. According to Robert Heilbroner, this fascination is rooted in the fact that Marx was "the first to discover a whole mode of inquiring that would forever after belong to him. This was done previously only once, when Plato "discovered" the mode of philosophical inquiry.'32 Marx's mode of inquiry was that of social critique, and that was why he referred to himself not as philosopher, historian, or economist - though he was all of those - but as a social critic. It is also why his social philosophy and science continue to exert a strong influence on social thought.
As a philosopher Marx taught a philosophy of action, 'The philosophers,' he wrote, "have only interpreted the world, in various ways; the point, however, is to change it.'" As an economist Marx criticized classical economics more expertly and efficiently than any of its practitioners. His main influence, however, has been not intellectual but political. As a revolutionary, if judged by the number of worshiping followers, 'Marx must be considered a religious leader to rank with Christ or Mohammed.'54
While Marx the revolutionary has been canonized by millions ail over the world, economists have had to deal with - but more often ignore or misquote - his embarrassingly accurate predictions, among them the occurrence of 'boom' and 'bust' business cycles and the tendency of market-oriented economies to develop 'reserve armies' of unemployed, which today usually consist of ethnic minorities and women. Marx's main body of work, set forth in his three-volume Das Kapital, represents a thorough critique of capitalism. He viewed society and economics from the explicitly stated perspective of the struggle between workers and capitalists, but his broad ideas about social evolution allowed him to sec economic processes in much larger patterns.
Marx recognized that capitalist forms of social organization would speed the process of technological innovation and increase material productivity, and he predicted that this, dialectically, would change social relationships. Thus he was able to foresee phenomena like monopolies and depressions and to predict that capitalism would foster socialism - as it has - and that it would, eventually, disappear - as it may. In the first volume of Kapilaly Marx stated his indictment of capitalism in the following words:
Today, in the context of our crisis-ridden, corporate-dominated global economy with its megarisk technologies and its enormous social and ecological costs, this statement has lost none of its power.
It is generally pointed out by Marx's critics that the labor force in the United States, which one would have expected to be the first to organize politically and rise up to create a socialist society, failed to do so because workers received high enough wages to begin identifying with the upward mobility of the middle class. But, there are several other explanations for the failure of socialism to take hold in the United States36 American workers were extremely transient, moving with their jobs along a changing frontier;
they were divided by their languages and other ethnic differences which factory owners did not fail to exploit; and enormous numbers of them went back to the old country as soon as they acquired the means to provide a better life for their waiting families. Thus the opportunities for organizing a European-type socialist party were very limited. On the other hand, it is true that American workers have not been continually immiserated but have ridden the escalator of material wealth, although at relatively low levels and with much struggle.
Another important point is that in the late twentieth century the Third World has taken on the role of the proletariat because of the development of multinational corporations, which Marx did not foresee. Today these multinationals play off workers in one country against those in another, exploiting racism, sexism, and nationalism. Thus advantages won by American workers are generally to the detriment of those in Third World countries; the Marxist slogan 'Workers of the world unite!' has become even more difficult to achieve.
In his 'Critique of Political Economy^ as he subtitled Das Kapilal, Marx used the labor theory of value to raise issues of justice, and developed powerful new concepts to counter the reductionist logic of the neoclassical economists of his time. He knew that to a large extent wages and prices are politically determined. Starting from the premise that human labor creates all values, Marx observed that continuing and reproducing labor must, at the very least, produce subsistence for the worker plus enough to replace the materials used up. But in general, there will be a surplus over and above that minimum. The form this 'surplus value' takes will be a key to the structure of society, to both its economy and its technology.37
In capitalist societies, Marx pointed out, the surplus value is appropriated by capitalists, who own the means of production and determine the conditions of labor. This transaction between people of unequal power allows the capitalists to make more money from the labor of the workers, and thus money is turned into capital. In this analysis Marx emphasized that the precondition for capital to arise was a specific social class relationship, itself the product of a long history.38 Marx's basic critique of neoclassical economics, as valid today as it was then, is that economists, by narrowing their field of inquiry to the "economic core process,' evade the ethical issue of distribution. As the non-Marxist economist Joan Robinson has put it, they shifted 'from a measure of value ... to the much less burning question of relative prices.'39 Value and prices, however, are very different concepts. Another non-Marxist, Oscar Wilde, said it best: 'It's possible to know the price of everything and the value of nothing.'
Marx was not rigid in his labor theory of value but always seemed to allow for change. He predicted that labor would become more 'mental,' as science and knowledge were increasingly applied to the production process, and he also acknowledged the important role of natural resources. Thus he wrote in his early Economic and Philosophic Manuscripts, 'The worker can create nothing without nature, without the sensuous, external world. It is the material on which his labor is manifested, in which it is active, from which and by means of which it produces.'40
In Marx's time, when resources were plentiful and the population was small, human labor was indeed the most important contribution to production. But as the twentieth century unfolded, the labor theory of value made less sense, and today the production process has become so complex that it is no longer possible to neatly separate the contributions of land, labor, capital, and other factors.
Marx's view of the role of nature in the process of production was part of his organic perception of reality, as Michael Harrington has emphasized in his persuasive reassessment of Marxian thought.41 This organic, or systems view is often overlooked by Marx's critics, who claim that his theories are exclusively deterministic and materialistic. In dealing with the reductionist economic arguments ofhi& contemporaries, Marx fell into the trap of expressing his ideas in 'scientific' mathematical formulas that undermined his larger sociopolitical theory. But that larger theory consistently reflected a keen awareness of society and nature as an organic whole, as in this beautiful passage from the Economic and Philosophic Manuscripts:
Marx emphasized the importance of nature in the social and economic fabric throughout his writings, but it was not the central issue for an activist of the day. Nor was ecology a burning problem then, and Marx could not have been expected to emphasize it strongly. But he was aware of the ecological impact of capitalist economics, as we can see in many of his statements, however incidental they may be. To quote just one example, 'All progress in capitalist agriculture is progress in the art, not only of robbing the laborer but of robbing the soil/43
It seems, then, that although Marx did not strongly emphasize ecological concerns, his approach could have been used to predict the ecological exploitation that capitalism produced and socialism perpetuated. One can certainly fault his followers for not grasping the ecological issue earlier, since it provided yet another devastating critique of capitalism and confirmed the vigor of the Marxian method. Of course, if Marxists had faced the ecological evidence honestly, they would have been forced to conclude that socialist societies had not done much better, their ecological impact being diminished only by their lower consumption (which in any case they were trying to increase).
Ecological knowledge is subtle and difficult to use as a basis for social activism, since other species - whether whales, redwoods, or insects - do not provide revolutionary energies to change human institutions. This is probably why Marxists have ignored the 'ecological Marx' for so long. Recent scholarship has brought to light some of the subtleties in Marx's organic thinking, but these are inconvenient for most social activists, who prefer to organize around simpler issues. Perhaps this is why Marx finally stated at the end of his life, 'I am not a Marxist.144
Marx, like Freud, had a long and rich intellectual life, with many creative insights that have decisively shaped our age. His social critique has inspired millions of revolutionaries around the world, and the Marxian economic analysis is respected academically not only in the socialist world but also in most European countries, as well as Canada, Japan, and Africa - in fact, in virtually the entire world except the United States. Marxian thought is capable of a wide range of interpretations and thus continues to fascinate scholars. Of particular interest for our analysis is the relation of the Marxian critique to the reductionist framework of the science of its time.
Like most nineteenth-century thinkers, Marx was very concerned about being scientific, using the term 'scientific' constantly in the description of his critical approach. Accordingly he often attempted to formulate his theories in Cartesian and Newtonian language. Still, his broad view of social phenomena allowed him to transcend the Cartesian framework in significant ways. He did not adopt the classical stance of the objective observer, but fervently emphasized his role as participator by asserting that his social analysis was inseparable from social critique. In his critique he went beyond social issues and often revealed deep humanistic insights, for example in his discussion of the concept of alienation.45 Finally, although Marx often argued for technological determinism, which made his theory more acceptable as ascience, he also had profound insights into the interrelated-ness of all phenomena, seeing society as an organic whole in which ideology and technology were equally important.
By the middle of the nineteenth century, classical political economy had branched into two broad streams. On one side were the reformers: Utopians, Marxists, and the minority of classical economists who followed John. Smart Mill. On the other side were the neoclassical economists, who concentrated on the economic core process and developed the school of mathematical economics. Some of them tried to establish objective formulas for the maximization of welfare, others retreated into evermore abstruse mathematics to escape the devastating critiques of the Utopians and the Marxists.
Much of mathematical economics was - and is - devoted to studying the 'market mechanism' with the help of curves for demand and supply, always expressed as functions of prices and based on various assumptions about economic behavior, many of them highly unrealistic in today's world. For example, perfect competition in free markets, as postulated by Adam Smith, is assumed in most models. The essence of the approach can be illustrated by the basic supply-demand graph featured in all introductory economics textbooks (p. 220).
The interpretation of this graph is based on the Newtonian assumption that the participants in a market will 'gravitate' automatically (and of course without any 'friction') to the 'equilibrium' price given by the point of intersection between the two curves.
As mathematical economists refined their models during the late nineteenth and early twentieth centuries, the world economy headed for the worst depression in. its history, which shook the foundations of capitalism and seemed to verify all the Marxian predictions. However, after the Great Depression there was one more turn of the wheel of capitalism's fortunes, stimulated by the social and economic interventions of governments. These policies were based on the theory of John Maynard Keynes, who had a decisive influence on modern economic thought.
Keynes was keenly interested in the entire social and political scene and viewed economic theory as an instrument of policy. He bent the so-called value-free methods of neoclassical economics to serve instrumental purposes and goals, and in doing so made economics once again political, but this time in a new way. This, of course, involved giving up the ideal of the objective scientific observer, which neoclassical economists were very reluctant to do. But Keynes calmed their fears of interfering with the balancing operations of the market system by showing them that he could derive his policy interventions from the neoclassical model. To do this he demonstrated that economic equilibrium states were 'special cases', exceptions rather than the rule in the real world.
To determine the nature of govenment interventions, Keynes shifted his focus from the microlevel to the macro-level - to economic variables like the national income, total consumption and total investment, the total volume of employment, and so on. By establishing simplified relations between these variables, he was able to show that they were susceptible to short-term changes that could be influenced by appropriate policies. According to Keynes, these fluctuating business cycles were an intrinsic property of national economies. Ibis theory was in opposition to orthodox economic thought, which postulated full employment, but Keynes defended his heresy by appealing to experience, pointing out that it was 'an outstanding characteristic of the economic system in which we live that ... it is subject to severe fluctuations with respect to output and employment.746
In the Keynesian model additional investment will always increase employment, and thus increase the total level of income, which will in turn lead to higher demand for consumer goods. In this way investment stimulates economic growth and increases national wealth, which will, eventually, 'trickle down* to the poor. However, Keynes never said that this process would culminate in full employment; it will only move the system in that direction -т peter out at some level of underemployment, or even go into reverse, depending on many assumptions that are not part of the Keynesian model.
This explains the crucial role of advertising as a means for big companies to 'manage' the demand in the marketplace. Consumers must not only keep increasing their spending; they must do so predictably for the system to work. Today the classical economic theory has almost been turned on its head. Economists of whatever persuasion, in their different ways, all create business cycles, consumers are forced to become involuntary investors, and the market is managed by business and government actions, while neoclassical theorists still invoke the Invisible Hand.
In the twentieth century the Keynesian model became thoroughly assimilated into the mainstream of economic thought. Most economists have remained uninterested in the political problem of unemployment, and instead have continued their attempts to Tine tune' the economy by applying the Keynesian remedies of printing money, raising or lowering interest rates, cutting or increasing taxes, and so on. However, these methods ignore the detailed structure of the economy and the qualitative nature of its problems and hence are generally unsuccessful. By the 1970s, the flaws of Keynesian economics had become apparent.
The Keynesian model has now become inappropriate because it ignores so many factors that are crucial to understanding the economic situation. It concentrates on the domestic economy, dissociating it from the global economic network and disregarding international economic agreements;
it neglects the overwhelming political power of multinational corporations, pays no attention to political conditions, and ignores the social and environmental costs of economic activities. At best the Keynesian approach can provide a set of possible scenarios but cannot make specific predictions. Like most of Cartesian economic thought, it has outlived its usefulness.
Contemporary economics is a mixed bag of concepts, theories, and models stemming from various epochs of economic history. The main schools of thought that have emerged are the Marxist school and 'mixed' economics, a modern version of neoclassical economics using more sophisticated mathematical techniques but still based on classical notions. In the late 1930s and the 1940s a new "neociassical-Keyne&ian synthesis' was proclaimed, but such a synthesis actually never took place. The neoclassical economists simply took the Keynesian tools and grafted them onto their own models, trying to manipulate the so-called market forces while at the same time, schizophrenically, retaining the old equilibrium concepts.
More recently a very heterogeneous group of economists has been called collectively the 'post-Keynesian' school. The more conservative proponents of post-Keynesian thoughtare advertising a new brand of so-called supply-side economics that has found powerful adherents in Washington. Their basic argument is that after the failure of Keynesians to stimulate demand without increasing inflation, one should now stimulate supply, for example by investing more in factories and automation and by removing 'unproductive' environmental controls. This approach is manifestly antiecological, likely to result in rapid exploitation of natural resources and thus bound to aggravate our problems. Other post-Keynesians have begun to analyze the structure of the economy in a more realistic way. They reject the free-market model and the concept of the Invisible Hand, recognizing that the economy is now dominated by massive corporate institutions and by government agencies which often cater to them. But most post-Keynesians still use too highly aggregated data, inappropriately derived from microanaly-ses; neglect to qualify the concept of growth; and do not seem to have a clear view of the ecological dimensions of our econonomic problems. Their elaborate quantitative models describe fragmented segments of economic activity; these are supposed to have an empirical basis and to represent nothing but 'facts,' but are actually based on tacitly assumed neoclassical concepts.
All these models and theories - Marxist as well as non-Marxist - are still deeply rooted in the Cartesian paradigm, and thus inappropriate to describe today's closely interrelated and continually changing global economic system. It is not too easy for the uninitiated to understand the rather abstract and technical language of modem economics, but once this has been mastered the major flaws of contemporary economic thought become readily apparent.
One of the outstanding characteristics of today's economies, both capitalist and communist, is an obsession with growth. Economic and technological growth are seen as essential by virtually all economists and politicians, although it should by now be abundantly clear that unlimited expansion in a finite environment can only lead to disaster. The belief in the necessity of continuing growth is a consequence of overemphasis on yang values - expansion, self-assertion, competition - and can also be related to the Newtonian notions of absolute, infinite space and time. [t is a reflection of linear thinking; of the erroneous belief that if something is good for an individual or group, then more of the same will necessarily be better.
The competitive, self-assertive approach to business is part of the legacy of John Locke's atomistic individualism, which in America was vital to the small band of early settlers and explorers but has now become unhealthy, unable to deal with the intricate web of social and ecological relations characteristic of mature industrial economies. The prevailing creed in government and business is still that the common good will be maximized if all individuals, groups, and institutions maximize their own material wealth - what is good for General Motors is good for the United States. The whole is identified with the sum of its parts, and the fact that it can be either more or less than this sum, depending on the mutual interference between the parts, is ignored. The consequences of this reductionist fallacy are now becoming painfully visible, as economic forces increasingly collide with each other, tear the social fabric, and ruin the natural environment.
The global obsession with growth has resulted in a remarkable similarity between capitalist and communist economies. The two dominant representatives of these so-called opposing value systems, the United States and the Soviet Union, no longer seem to be all that different. Both are dedicated to industrial growth and hard technology, with increasingly centralized and bureaucratic control, whether by the state or by so-called 'private' multinational corporations. The universal addiction to growth and expansion is becoming stronger than all other idealologies; to borrow Marx's phrase, it hs become the opium of the people.
In a sense, the common belief in growth is justified, because growth is an essential feature of life. Women and men have known this since ancient times, as we can see from the terms used in antiquity to describe reality. The Greek word phusis - the root of our modern terms physics, physiology, and physician - as well as the Sanskrit brahman, both of which denoted the essential nature of all things, derive from the same Indo-European root bheu, 4o grow.' Indeed, evolution, change, and growth seem to be essential aspects of reality. What is wrong with current notions of economic and technological growth, however, is the lack of any qualification. It is commonly believed that all growth is good without recognizing that, in a finite environment, there has to be a dynamic balance between growth and decline. While some things have to grow, others have to diminish, so that their constituent elements can be released and recycled.
Most of today's economic thought is based on the notion of undifferenimied growth. The idea that growth can be obstructive, unhealthy, or pathological is not entertained. What we urgently need, therefore, is differentiation and qualification of the concept of growth. From excessive production and consumption in the private sector, growth will have to be channeled into public service areas such as transportation, eduction, and health care. And this change will have to be accompanied by a fundamental shift of emphasis from material acquisition to inner growth and development.
There are three closely interrelated dimensions of growth in most industrial societies - economic, technologial, and institutional. Continuing economic growth is accepted as a dogma by virtually all economists, who assume, with Keynes, that it is the only way to insure that material wealth will trickle down to the poor. This "trickle-down' model of growth has long been shown to be unrealistic. High rates of growth not only do little to ease urgent social and human problems but in many countries have been accompanied by increasing unemployment and a general deterioration of social conditions.47 Yet economists and politicians still insist on the importance of economic growth. Thus Nelson Rockefeller asserted as late as 1976, at a meeting of the Club of Rome: 'More growth is essential if all the millions of Americans are to have the opportunity to improve their quality of life/4"
What Rockefeller was referring to, of course, was not the quality of life but the so-called standard of living, which is equated with material consumption. Manufacturers spend enormous amounts of money on advertising to keep up a pattern of competitive consumption, many of the goods thus consumed are unnecessary, wasteful, and often outright harmful. The price we pay for this excessive cultural habit is the continual degradation of the real quality of life - the air we breathe, the food we eat, the environment we live in, and the social relations that constitute the fabric of our lives. These costs of wasteful overconsumption were well documented several decades ago and have continued to increase.49
The most severe consequence of continuing economic growth is the depletion of the planet's natural resources. The rate of this depletion was predicted with mathematical precision in the early 1950s by the geologist M. King Hubbert, who tried to present his hypothesis to President John Kennedy and to subsequent American presidents but was generally considered a crank. In the meantime history has confirmed Hubbert's predictions to the finest details, and he has lately received many awards.
Hubbert's estimates and calculations show that the production/depletion curves for all nonrenewable natural resources are bell-shaped, not unlike the curves picturing the rise and fall of civilizations.50 They first increase gradually, then rise dramatically, peak, decline sharply, and eventually peter out. Thus Hubbert predicted that petroleum and natural gas production in the United States would peak in the 1970s, as it did, and then begin the descent that continues today. The same model predicts that world petroleum production will reach its highest point in the 1990s, and world coal production during the twenty-first century. The important aspect of these curves is that they describe the depletion of every single natural resource, from coal, petroleum, and natural gas to metals, forest, and fish reserves, and even oxygen and ozone. We may find alternatives to energy production from fossil fuels, but this will not stop the depletion of our other resources. If we continue the current patterns ofundifferentiated growth, we will soon exhaust the reserves of metals, food, oxygen, and ozone that are crucial to our survival.
To slow down the rapid depletion of our natural resources we need not only to abandon the idea of continuing economic growth, but to control the worldwide increase in population. The dangers of this 'population explosion' are now generally recognized, but views on how to achieve 'zero population growth' differ widely, with proposed methods ranging from education and voluntary family planning to coercion by legal means and by brute force. Most of these proposals are based on the view of the problem as a purely biological phenomenon, related only to fertility and contraception. But there is now conclusive evidence, collected by demographers around the world, that population growth is affected as much, if not more, by powerful social factors. The view that this research demands sees the rate of growth as affected by a complex interplay of biological, social, and psychological forces.
Demographers have discovered that the significant pattern is a transition between two levels of stable populations that has been characteristic of all Western countries. In premodern societies birth rates were high, but so were death rates, and thus the population size was stable. As living conditions improved during the time of the Industrial Revolution, death rates began to fall, and, with birth rates remaining high, populations increased rapidly. However, with continuing improvement of living standards, and with the decline in death rates continuing, birth rates began to decline as well; thus reducing the rate of population growth. The reason for this decline has now been observed worldwide. Through the interplay of social and psychological forces, the quality of life - the fulfillment of material needs, a sense of well-being, and confidence in the future - becomes a powerful and effective motivation for controlling population growth. There is, in fact, a critical level of well-being which has been shown to lead to a rapid reduction in birth rate and an approach to a balanced population. Human societies, then, have developed a self-regulating process, based on social conditions, which results in a demographic transition from a balanced population, with high birth rates and high death rates and a low standard of living, to a population with a higher standard of living which is larger but again in balance, and in which both birth and death rates are low.
The present global population crisis is due to the rapid increase of population in the Third World, and the considerations outlined above show clearly that this increase continues because the conditions for the second phase of the demographic transition have not been met. During their colonial past the Third World countries experienced an improvement in living conditions that was sufficient to reduce death rates and thus initiated population growth. But the rise of living standards did not continue, because the wealth generated in the colonies was diverted to the developed countries, where it helped their populations to become balanced. This process continues today, as many Third World countries remain colonized in the economic sense. This exploitation continues to increase the affluence of the colonizers and prevents Third World populations from reaching the standard of living conducive to a reduction of their rate of growth.
The world population crisis, then, is an unanticipated effect of international exploitation, a consequence of the fundamental interrelatedness of the global ecosystem, in which every exploitation eventually comes back to haunt the exploiters. From this point of view it becomes quite apparent that ecological balance also requires social justice. The most effective way to control population growth will be to help the peoples of the Third World achieve a level of well-being that will induce them to limit their fertility voluntarily. This will require a global redistribution of wealth in which some of the world's wealth is returned to the countries that have played a major role in producing it.
An important aspect of the population problem, which is not generally known, is that the cost of bringing the standard of living of poor countries to a level that appears to convince people that they should not have excessive numbers of children is very small compared to the wealth of developed countries. That is to say, there is enough wealth to support the entire world at a level that leads to a balanced population.52 The problem is that this wealth is unevenly distributed, and much of it is wasted. In the United States, where excessive consumption and waste have become a way of life, 5 percent of the world's population now consumes a third of its resources, with energy consumption per capita about twice as high as in most European countries. Simultaneously the frustrations created and sustained by massive doses of advertising, combined with social injustice within the nation, contribute to ever increasing crime, violence, and other social pathologies. This sad state of affairs is well illustrated by the schizophrenic content of our weekly magazines. Half their pages are filled with grim stories about violent crimes, economic disaster, international political Tension, and the race toward global destruction, while the other half portray carefree, happy people behind packs of cigarettes, bottles of alcohol, and shiny new cars. Advertising on television influences the content and form of all programs, including the 'news shows,' and uses the tremendous suggestive power of this medium - switched on for six and a half hours a day by the average American family - to shape people's imagery, distort their sense of reality, and determine their views, tastes and behavior.53 The exclusive aim of this dangerous practice is to condition the audience into buying products advertised before, after, and during each program.
Economic growth, in our culture, is inextricably linked with technological growth. Individuals and institutions are mesmerized by the wonders of modern technology and have come to believe that every problem has a technological solution, Whether the nature of the problem is political, psychological, or ecological, the first reaction, almost automatically, is to deal with it by applying or developing some new technology. Wasteful energy consumption is countered by nuclear power, lack of political insight is compensated for by building more missiles and bombs, and the poisoning of the natural environment is remedied by developing special technologies that, in turn, affect the environment in still unknown ways. By looking for technological solutions to all problems, we usually just shift these around in the global ecosystem, and very often the side effects of the 'solution'are more harmful than. the original problem.
The ultimate manifestation of our obsession with high technology is the widely entertained fantasy that our current problems can be solved by creating artificial habitats in outer space. I do not exclude the possibility that such space colonies may be built some day, although from what I have seen of existing plans and of the mentality underlying them [ would certainly not want to live there. However, the basic fallacy of the whole idea is not technological; it is the naive belief that space technology сад solve the social and cultural crisis on this planet.
Technological growth is not only regarded as the ultimate problem solver but is also seen as determining our life styles, our social organizations, and our value system. Such 'technological determinism' seems to be a consequence of the high status of science in our public life - as compared to philosophy, art, or religion - and of the fact that scientists have generally failed to deal with human values in significant ways. This has led most people to believe that technology determines the nature of our value system and our social relations, rather than recognizing that it is the other way round; that our values and social relations determine the nature of our technology.
The yang, masculine consciousness that dominates our culture has found its fulfillment not only in 'hard' science but also in the 'hard' technology derived from it. This technology is fragmented rather than holistic, bent on manipulation and control rather than cooperation, self-assertive rather than integrative, and suitable for centralized management rather than regional application by individuals and small groups. As a result, this technology has become profoundly antiecological, antisocial, unhealthy, and inhuman.
The most dangerous manifestation of our hard, 'macho' technology is the expansion of nuclear weapons, which amounts to the most expensive military boom in history.54 By brainwashing the American public and effectively controlling its representatives, the military-industrial complex has succeeded in extracting regularly increasing defense budgets that are used to design weapons to be employed in a 'science-intensive' war ten or twenty years from now, A third to a half of America's scientists and engineers work for the military, using all their imagination and creativity to invent ever more sophistiated means for total destruction - laser communication systems, particle beams, and other complex technologies for computerized warfare in outer space.55
It is striking that all these efforts focus exclusively on hardware. America's defense problems, like all its others, are perceived as simply problems of hard technology. The idea that psychological, social, and behavioral research - let alone philosophy or poetry - could also be relevant is not mentioned. Moreover, the question of national security is analyzed predominantly in terms of 'power blocks,' 'action and reaction,' the 'political vacuum,' and similar Newtonian notions.
The effects of the military's excessive use of hard technology are similar to those encountered in the civilian economy. The complexity of our industrial and technological systems has now reached a point where many of those systems can no longer be either modeled or managed. Breakdowns and accidents occur with increasing frequency, unanticipated social and environmental costs are continually generated, and more time is spent on maintaining and regulating the system than on providing useful goods and services. Such enterprises, therefore, are highly inflationary, in addition to their severe effects on our physical and mental health. Thus it is becoming increasingly apparent, as Henderson has pointed out, that we may reach the social, psychological, and conceptual limits to growth even before the physical limits are reached.56
What we need, then, is a redefinition of the nature of technology, a change of its direction, and a reevaluation of its underlying value system. If technology is understood in the broadest sense of the term, as the application of human knowledge to the solution of practical problems, it becomes clear that we have concentrated too much on 'hard,' highly complex, and resource-intensive technologies and must now shift our attention to the 'soft' technologies of conflict resolution, social agreements, cooperation, recycling and redistribution, and so on. As Schumacher says in his boob. Small Is Beautiful, we need a 'technology with a human face.'57
The third aspect of undifferentiated growth, which is inseparable from economic and technological growth is the growth of institutions - from companies and corporations to colleges and universities, churches, cities, governments, and nations. Whatever the original purpose of the institution, its growth beyond a certain size invariably distorts that purpose by making the self-preservation and further expansion of the institution its overriding aim. At the same time the people belonging to the institution and those who have to deal with it feel increasingly alienated and depersonalized, while families, neighborhoods, and other small-scale social organizations are threatened and often destroyed by institutional domination and exploitation.58
One of the most dangerous manifestations of institutional growth today is that of corporations. The largest of them have now transcended national boundaries and have become major actors on the global stage. The assets of these multi-national giants exceed the gross national products of most nations; their economic and political power surpasses that of many national governments, threatening national sovereignty and world monetary stability. In most countries of the Western world, but especially in the United States, corporate power permeates virtually every facet of public life. Corporations largely control the legislative process, distort th-e information received by the public through the media, and determine, to a significant extent, the functioning of our educational system and the direction of academic research. Corporate and business leaders are prominent on the boards of trustees of academic institutions and foundations, where they inevitably use their influence to perpetuate a value system consistent with corporate interests.59
The nature of large corporations is profoundly inhuman. Competition, coercion, and exploitation are essential aspects of their activities, all motivated by the desire for indefinite expansion. Continuing growth is built into the corporate structure. For example, corporate executives who knowingly bypass an opportunity for increasing the corporation^ profits, for whatever reason, are liable to lawsuit. Thus the maximizing of profits becomes the ultimate goal, to the exclusion of atl other considerations. Corporate executives have to leave their humaneness behind when they attend their board meetings. They are not expected to show any feelings, nor to express any regrets; they can never say 'I am sorry' or *we made a mistake.' What they talk about instead is coercion, control, and manipulation.
Large corporations, then, work like machines rather than human institutions once they have grown beyond a certain size. However, there are no laws, national or international, to deal effectively with these giant institutions. The growth of corporate power has outstripped the development of an appropriate legal framework. Laws made for humans are applied to corporations that have lost all resemblance to human beings. The concepts of private property and enterprise have become confused with corporate property and state capitalism, and 'commercial speech' is now protected by the First Amendment. On the other hand, these corporations do not assume the responsibilities of individuals, being designed so that none of their executives can be held fully accountable for corporate activities. Many corporate leaders, in fact, believe that corporations are value-free and should be allowed to function outside the moral and ethical order. This dangerous notion was expressed unite candidly by Walter Wriston, who chairs Citibank, the second largest bank in the world. In a recent interview, Wriston made this chilling comment: "Values are topsy-turvy . . . Now college students have a mixed dormitory, men live on one floor and women on the next, and they all sit around worrying about whether or not General Motors is being honest ... I believe that there are no institutional values, only personal ones.'60
As multinational corporations intensify their global search for natural resources, cheap labor, and new markets, the environmental disasters and social tensions created by their obsession with indefinite growth become ever more apparent. Thousands of small businesses are driven from the marketplace by the power of large companies that are able to win federal subsidies for their complex, capital-intensive, and resource-consuming technologies. At the same time there is a tremendous need for simple skills like carpentry, plumbing, tailoring, and all kinds of repair and maintenance jobs which have been socially devalued and severely neglected although they are as vital as ever. Instead of regaining self-sufficiency by changing occupations and practicing these skills, most workers remain totally dependent on large corporate institutions and, in times of economic hardship, see no other alternative to collecting unemployment checks and accepting passively that the situation is beyond their control.
If the consequences of corporate power are harmful in the industrialized countries, they are altogether disastrous in the Third World. In those countries, where legal restrictions are often nonexistent or impossible to enforce, the exploitation of people and of their land has reached extreme proportions. With the help of skillful manipulation of the media, emphasizing the 'scientific" nature of their enterprises, and often with full support from the U.S. government, multinational corporations ruthlessly extract the Third World's natural resources. To do so, they often use polluting and socially disruptive technologies, thus causing environmental disaster and political chaos. They abuse the soil and wilderness resources of Third World countries to produce profitable cash crops for export instead of food forthe local population, and promote unhealthy patterns of consumption, including the sale of highly dangerous products that have been outlawed in the United States. The numerous horror stories of corporate behaviour in the Third World which have emerged in recent years show convincingly that respect for people, for nature, and for life are not part of the corporate mentality. On the contrary, Large-scale corporate crime is today the most widespread and least prosecuted criminal activity.61
Many of the large corporations are now obsolete institutions that lock up capital, management, and resources but are unable to adapt their functioning to changing needs. A well-known example is the automobile industry, which is unable to adjust to the fact that the global limitations of energy and resources will force us to drastically restructure our transportation system, shifting to mass transit and to smaller, more efficient, and more durable cars. Similarly, the utility companies require ever expanding demands for electricity to justify their corporate growth, and have thus embarked on a vigorous campaign for nuclear power, rather than promoting the small-scale, decentralized solar technology which alone can provide the environment conducive to our survival.
Although these corporate giants are often close to bankruptcy, they still have the political power to persuade government to bail them out with taxpayers' money. Their argument is, invariably, that their efforts are motivated by the preservation of jobs, although it has been clearly shown that small-scale, labor-intensive enterprises create more jobs and generate much lower social and environmental costs.62 We will always need some large-scale operations, but many of the giant corporations, dependent on energy- and resource-intensive means of production to provide marginally useful goods, must either be fundamentally transformed or pass from the scene. They will then release the capital, resources, and human ingenuity that can build a sustainable economy and develop alternative technologies.
The question of scale - which Schumacher pioneeredwith the slogan 'Small is beautiful' - will play a crucial role in the reassessment of our economic system and our technology. The universal obsession with growth has been accompanied by an idolatry ofgigantism, of "the bigness of things,' as Theodore Roszak has called it.63 Size, of course, is relative, and small structures are not always better than big ones. In our modern world we need both, and our task will be to achieve a balance between the two. Growth will have to be qualified and the notion of scale will play a crucial role in the restructuring of our society. The qualification of growth and the integration of the notion of scale into economic thought will cause a profound revision of the basic conceptual framework of economics. Many economic patterns that are now tacitly assumed to be inevitable will have to be changed; all economic activity will have to be studied within the context of the global ecosystem; most concepts used in current economic theory will have to be expanded, modified, or abandoned.
Economists tend to freeze the economy arbitrarily in its current institutional structure instead of seeing it as an evolving system that generates continually changing patterns. To grasp this dynamic evolution of the economy is extremely important, because it shows that strategies which are acceptable at one stage may become totally inappropriate at another. Many of our present problems come from the fact that we have often overshot the mark in our technological enterprises and economic planning. As Hazel Henderson likes to say, we have reached a point where 'nothing fails like success.' Our economic and institutional structures are dinosaurs, unable to adapt to environmental changes and therefore bound to die out.
Today^s world economy is based on past configurations of power, perpetuating class structures and unequal distribution of wealth within national economies, as well as exploitation of Third World countries by rich industrialized nations. These social realities are largely ignored by economists, who tend to avoid moral issues and accept the current distribution of wealth as given and unchangeable. In most Western countries economic wealth is highly concentrated and tightly controlled by a small number of people who belong to the 'corporate class^ and derive their income largely from ownership.64 In the United States, 76 percent of all corporate securities are owned by 1 percent of the stockholders while, at the bottom, 50 percent of the people own only 8 percent of the nation's wealth.6^ Paul Samuelson illustrates this skewed distribution of wealth in his well-known textbook Economics with a graphic analogy: *Ifwe made today an income pyramid out of a child's blocks, with each layer portraying $1,000 of income, the peak would be far higher than the Eiffel Tower, but almost all of us would be within a yard of the ground.'66 This social inequality is not an accident but is built into the very structure of our economic system and is perpetuated by our emphasis on capital-intensive technologies. The necessity of continuing exploitation for the growth of the American economy was pointed out quite bluntly by the Wall Street Journal in an editorial on ^Growth and Ethics,' which insisted that the United States would have to choose between growth and greater equality, since the maintenance of inequality was necessary to create capital.67
The grossly unequal distribution of wealth and income within Industrialized countries is paralleled by similar patterns of maldistribution between developed countries and the Third World. Programs of economic and technological aid to Third World countries are often used by multinational corporations to exploit those countries' labor and natural resources and to fill the pockets of a small and corrupt elite. As the cynical saying goes, ^Economic aid is taking money from the poor people in rich countries and giving it to the rich people in poor countries." The result of these practices is the perpetuation of an 'equilibrium of poverty' in the Third World, with life near the bare level of subsistence.6^
The avoidance of social issues in current economic theory is closely related to the striking inability of economists to adopt an ecological perspective. The debate between ecolo-gists and economists has now been going on for two decades and has shown very clearly that the main body of contemporary economic thought is inherently antiecological.6^ Economists neglect social and ecological interdependence, treating all goods equally without considering the many ways in which these goods are related to the rest of the world -whether they are human-made or naturally occurring, renewable or nonrenewable, and so on. Ten dollars' worth of coal equals ten dollars' worth of bread, transportation, shoes, or education. The only criterion for determining the relative value of these goods and services is their monetary market value: all values are reduced to the single criterion of private profitmaking.
Since the conceptual framework of economics is ill suited to account for the social and environmental costs generated by all economic activity, economists have tended to ignore these costs, labeling them 'external' variables that do not fit into their theoretical models. And since most economists are employed by private interest groups to prepare cost/benefit analyses that are usually heavily biased in favor of their employers' projects, there are very few data on even the easily quantifiable 'externalities.' Corporate economists not only treat the air, water, and various reservoirs of the ecosystem as free commodities, but also the delicate web of social relations, which is severely affected by continuing economic expansion. Private profits are being made increasingly at public costs in the deterioration of the environment and the general quality of life. As Henderson writes, 'They tell us about the sparkling dishes and clothes, but forget to mention the loss of those sparkling rivers and lakes.'70
Economists' inability to see economic activities within their ecological context prevents them from understanding some of the most significant economic problems of our time, foremost among them the tenacious persistence of inflation and unemployment. There is no single cause of inflation, but several major sources can be identified, and most economists fail to understand inflation because all these sources involve variables that have been excluded from current economic models. Economists often do not take into account the factthat wealth is based on natural resources and energy, though this is increasingly hard to ignore. As the resource base declines, raw materials and energy must be extracted from ever more degraded and Inaccessible reservoirs, and thus more and more capital is needed for the extraction process. As a consequence, the inevitable decline of natural resources, following the well-known bell-shaped curves, is accompanied by an unremitting exponential climb of the price of resources and energy, and this becomes one of the main driving forces of inflation.
The excessive energy- and resource-dependence of our economy is reflected in the fact that it is capital-intensive rather than labor-intensive. Capital represents a potential for work, extracted from past exploitation of natural resources. As these resources diminish, capital itself is becoming a very scarce resource. In spite of this, and because of a narrow notion of productivity, there is a strong tendency to substitute capital for labor, in both capitalist and Marxist economies. The business community lobbies incessantly for tax credits for capital investments, many of which reduce employment through automation by means of such highly complex technologies as automated check-out lines in supermarkets, and electronic funds transfer systems in banks. Both capital and labor produce wealth, but a capital-intensive economy isalso resource- and energy-intensive, and thus highly inflationary.
A striking example of such a capital-intensive enterprise is the American system of agriculture, which exerts its inflationary impact on the economy at many levels. Production is achieved with the help of energy-intensive machines and irrigation systems, and by meansofheavy doses of oil-based pesticides and fertilizers. These methods not only destroy the organic balance in the soil and produce poisonous chemical substance in our food, but are also yielding ever diminishing returns and thus making farmers prime victims of inflation. The food industry then turns the agricultural products into overprocessed, overpackaged, and overadvertised food, transported across the country to be sold in large supermarkets, all of which requires excessive consumption ofenergy and thus fuels inflation,
The same is true for animal farming, which is heavily promoted by the petrochemical industry, since it takes about ten times more fossil-fuel energy to produce a unit of animal protein than a unit of plant protein. Most of the grain grown in the United States is not consumed by humans but is fed to livestock which is then eaten by people. As a result, most Americans suffer from an unbalanced diet that often leads to obesity and illness, thus contributing to inflation in health care. Similar patterns can be observed throughout our economic system. Excessive investment in capital, energy, and natural resources taxes the environment, affects our health, and is a major cause of inflation.
Conventional economic wisdom holds that there is a free market which naturally stays in balance. Inflation and unemployment are seen as interdependent temporary aberrations of the equilibrium state, one being the trade-off of the other. In today's reality, however, with economies dominated by huge institutions and interest groups, equilibrium models of this kind are no longer valid. The presumed trade-off between inflation and unemployment - expressed mathematically by the so-called Phillips curve - is an abstract and utterly unrealistic concept. Inflation and unemployment combined, known as 'stagflation,' have become a structural feature of all industrial societies committed to undifferen-tiated growth. Excessive dependence on energy and natural resources, and excessive investment in capital rather than labor, are not only highly inflationary but also bring massive unemployment. In fact, unemployment has become such an intrinsic feature of our economy that government economists now speak of'full employment' when more than 5 percent of the labor force is out of work.
The second major cause of inflation is the ever increasing social costs engendered by undifferentiated growth. In their attempts to maximize their profits, individuals, companies, and institutions try to 'externalize' all social and environmental costs; they try to exclude them from their own balan sheets and to push them onto each other, passing them < around the system, to the environment and to future genei tions. Gradually these costs accumulate and manifest ttiei selves as the costs of litigation, crime control, bureaucrai coordination, federal regulation, consumer protectio health care, and so on. None of these activities adds anythil to real production; all of them contribute significantly inflation.
Instead of incorporating such crucial social and enviro mental variables into their theories, economists tend to wo with elegant but unrealistic equilibrium models, most them based on the classical idea of free markets, whe buyers and sellers meet each other with equal power ai information. In most industrial societies large corporatio control the supply of goods, create artificial deman through advertising, and have a decisive influence < national policies. An extreme example is the oil companu which shape the energy policy of the United States to such extent that the crucial decisions are not made in the natior interest but rather in the interest of the domina corporations. This corporate interest, of course, hasnothil to do with the welfare of American citizens but is exclusive concerned with corporate profits. John Sweringen, chi executive officer of Standard Oil of Indiana, made this qui clear in a recent interview. 'We^re not in the ener business,' he said. "We're in the business of trying to use t assets entrusted to us by our shareholders to give them t best return on the money they've invested in the company. Corporate giants like Standard Oil now have the power determine, to a large extent, not only the national ener policy, but also our systems of transportation, agricultui health care, and many other aspects of our social ai economic life. Free markets, balanced by supply ai demand, have long disappeared; they exist only in o economics textbooks. Equally outdated in our glol economy is the Keynesian idea that fluctuating busin< cycles can be ironed out by using appropriate natiolpolicies. Yet today's economists still apply the traditional Keynesian tools to inflate or deflate the economy and thereby create short-term oscillations that obscure ecological and social real hies.
To deal with economic phenomena from an ecological perspective, economists will need to revise their basic concepts in a drastic way. Since most of these concepts were narrowly defined and have been used without their social and ecological context, they are no longer appropriate to map economic activities in our fundamentally interdependent world. The gross national product, for example, is supposed to measure a nation's wealth, but all economic activities associated with monetary values are added up indiscriminately for the GNP while all nonmonetary aspects of the economy are ignored. Social costs, like those of accidents, litigation, and health care, are added as positive contributions to the GNP; education is still often treated as an expenditure rather than an investment, whereas work done in households and goods produced by such work are not counted. Although the inadequacy of such a method of accounting is now widely recognized, there has been no serious effort to redefine the GNP as an effective measure of production and wealth.
Similarly, the concepts of 'efficiency,' 'productivity,' and 'profit^ are used in such a narrow context that they have become quite arbitrary. Corporate efficiency is measured in terms of corporate profits, but with these profits being made increasingly at public cost, we have to ask 'efficient for whom?' When economists talk about efficiency, do they mean efficiency at the individual level, at the level of the corporation, at the social level, or at the level of the ecosystem? A striking example of a highly biased use of the notion of efficiency is that of utility companies, which have been trying to persuade us that nuclear power is our most efficient source of energy, completely disregarding the tremendous social and environmental costs that arise from the handling of radio-active material. Such a skewed use of 'efficiency' is typical of the energy industry, which has misinformed us not only about social and environmental costs but also about the political realities behind the cost of energy. Having obtained heavy subsidies for conventional energy technology through their political power, the utility companies then turned around and declared that solar energy was inefficient because it could not compete with other energy sources in the 'free' market.
Examples of this kind abound. The American system of farming, highly mechanized and petroleum-subsidized, is now the most inefficient in the world when measured in terms of the amount of energy used for a given output of calories; yet agribusiness, which is largely owned by the petrochemical industry, makes huge profits. In fact the whole American industrial system, with its huge use of the planet's resources for a tiny percentage of its population, must be seen as highly inefficient from a global ecological point of view.
Closely related to 'efficiency' is the concept of 'productivity,' which has been similarly distorted. Productivity is usually defined as the output per employee per working hour. To increase this quantity, manufacturers tend to automate and mechanize the production process as much as possible. However, in doing so they increase the number of unemployed workers and lower their productivity to zero by adding them to the welfare rolls.
Together with the redefinition of "efficiency' and 'productivity' we shall need a thorough revision of the concept of 'profit.' Private profits are now too often reaped at the expense of social or environmental exploitation. These costs must be fully taken into account, so that the notion of profit becomes associated with the creation of real wealth. Many of the goods produced and sold 'profitably' today will then be recognized as wasteful and will be priced out of the market.
One of the reasons why the concept of 'profit' has become so distorted is the artificial division of the economy into private and public sectors, which has led economists to ignore the link between private profits and public costs. The relative roles of the private and public sectors in providinggoods and services are now being increasingly questioned, as more and more people ask themselves why we should accept the 'need* for multimillion-dollar industries devoted to pet foods, cosmetics, drugs, and all kinds of energy-wasting gadgets, when we are told at the same time that we cannot 'afford' adequate sanitary services, fire protection, or public transport systems in our cities.
The remapping of the economy is not merely an intellectual task but will involve profound changes in our value system. The idea of wealth itself, which is central to economics, is inextricably linked to human expectations, values, and life styles. To define wealth within an ecological framework will mean to transcend its present connotations of material accumulation and give it the broader sense of human enrichment. Such a notion of wealth, together with 'profit' and other related concepts, will not be amenable to rigorous quantification, and thus economists will no longer be able to deal with values exclusively in monetary terms. In fact, our current economic problems make it quite evident that money alone no longer provides an adequate tracking system.72
An important aspect of the necessary revision of our value system will be the redefinition of 'work.'7^ In our society work is identified with a job; it is done for an employer and for money; unpaid activities do not count as work. For example, the work performed by women and men in households is not assigned any economic value; yet this work equals, in monetary terms, two-thirds of the total amount of wages and salaries paid by all the corporations in the United States.74 On the other hand, work in paid jobs is no longer available for many who want it. Being unemployed carries a social stigma; people lose status and respect in their own and others' eyes because they are unable to get work.
At the same time, those who do have jobs very often have to perform work in which they cannot take any pride, work that leaves them profoundly alienated and dissatisfied. As Marx clearly recognized, this alienation comes from the fact that workers do not own the means of production, have no say about the use to which their work is put, and canm identify in any meaningful way with the production proces The modern industrial worker no longer feels responsible f< his work nor takes pride in it. The result is products th show less and less craft, artistic quality, or taste. Thus woi has become profoundly degraded; from the worker's point i view, its only purpose is to earn a living, while the employer exclusive aim is to increase profits.
Lack of responsibility and pride, together with tl overriding profit motive, have resulted in a situation whei most of the work carried out today is wasteful an unjustified. As Theodore Roszak has forcefully stated:
This state of affairs is in sharp contrast to traditional society in which ordinary women and men were engaged in a wid variety of activities - farming, fishing, hunting, weavinj making clothes, building, making pottery and tool; cooking, healing - all of them useful, skilled and dignifie work. In our society most people are unsatisfied by thei work and see recreation as the main focus of their lives. Thu work has become opposed to leisure, and the latter is serve by a huge industry featuring resource- and energy-intense gadgets - computer games, speedboats, and snowmobile - and exhorting people to ever more wasteful consumption
As far as the status of different kinds of work is concerned there is an interesting hierarchy in our culture. Work witi the lowest status tends to be that work which is mos 'entropic,'(Eniropy isa measure of disorder; see chapter 2, p.60. 245) i.e., where the tangible evidence of the effort is most easily destroyed. This is work that has to be done over and over again without leaving a lasting impact - cooking meals which are immediately eaten, sweeping factory floors which will soon be dirty again, cutting hedges and lawns which keep growing. In our society, as in all industrial cultures, jobs that involve highly entropic work - housework, services, agriculture - are given the lowest value and receive the lowest pay, although they are essential to our daily existence.76 These jobs are generally delegated to minority groups and to women. High-status jobs involve work that creates something lasting - skyscrapers, supersonic planes, space rockets, nuclear warheads, and all the other products of high technology. High status is also granted to all administrative work connected with high technology, however dull it may be.
This hierarchy of work is exactly opposite in spiritual traditions. There high-entropy work is highly valued and plays a significant role in the daily ritual of spiritual practice. Buddhist monks consider cooking, gardening, or housecleaning part of their meditative activities, and Christian monks and nuns have a long tradition of agriculture, nursing, and other services. It seems that the high spiritual value accorded to entropic work in those traditions comes from a profound ecological awareness. Doing work that has to be done over and over again helps us recognize the natural cycles of growth and decay, of birth and death, and thus become aware of the dynamic order of the universe. 'Ordinary' work, as the root meaning of the term indicates, is work that is in harmony with the order we perceive in the natural environment.
Such ecological awareness has been lost in our culture, where the highest value has been associated with work that creates something 'extraordinary,' something out of the natural order. Not surprisingly, most of this highly valued work is now generating technologies and institutions which are extremely harmful to the natural and social environment. What we need, therefore, is to revise the concept and practice of work in such a way that it becomes meaningful and fulfilling for the individual worker, useful for society, and part of the harmonious order of the ecosystem. To reorganize and practice our work in this way will allow us to recapture its spiritual essence.
The inevitable revision of our basic economic concepts and theories will be so radical that the question arises whether economics itself, as a social science, will survive it. Indeed, several critics have predicted the end of economics. I believe that the most useful approach would be not to abandon economics as such, but to regard the framework of current economic thought, so deeply rooted in the Cartesian paradigm, as a scientific model that has become outdated. It may well continue to be useful for limited microeconomic analyses, but will certainly need to be modified and expanded. The new theory, or set of models, is likely to involve a systems approach that will integrate biology, psychology, political philosophy, and several other branches of human knowledge, together with economics, into a broad ecological framework. The outlines of such a framework are already being shaped by numerous men and women who refuse to be labeled economists or be associated with any single conventional, narrowly defined academic discipline.77 Their approach is still scientific, but goes far beyond the Cartesian-Newtonian image of science. Its empirical basis includes not only ecological data, social and political facts, and psychological phenomena, but also a clear reference to cultural values. From this basis such scientists will be able to build realistic and reliable models of economic phenomena.
Explicit reference to human attitudes, values, and life styles in future economic thought will make this new science profoundly humanistic. It will deal with human aspirations and potentialities, and will integrate them into the underlying matrix of the global ecosystem. Such an approach will transcend by far anything attempted in today's sciences; in its ultimate nature it will be scientific and spiritual at the same time.
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