Newspaper article The Christian Science Monitor

Final Markdowns: The Earth's Clearance Sale Is Over

Newspaper article The Christian Science Monitor

Final Markdowns: The Earth's Clearance Sale Is Over

Article excerpt

YOU CAN'T EAT GNP By Eric Davidson Perseus

247 pp., $24

It's easy to make fun of the "dismal science." World-class economist Kenneth Boulding once said that "anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist." More recently, energy guru Amory Lovins of the Rocky Mountain Institute quipped that "economists are those people who lie awake nights worrying about whether what actually works in the real world could conceivably work in theory."

All very funny, except that the cost of valuing everything only in terms of dollars and cents makes no sense in the real world of life on the planet. Or to put it another way, neoclassical economics - upon which most political and social decisions are made today - amounts to an equation with very large holes in it.

As Eric Davidson points out in "You Can't Eat GNP: Economics as Though Ecology Mattered," some of these literally are holes - in Earth's protective ozone layer, in the blank spots among the list of living species where those now extinct used to reside, and in the clearcuts where healthy forests once stood.

Davidson, a senior scientist at the Woods Hole Research Center, takes on what he calls the "fallacies" of those economic descendants of Thomas Malthus, David Ricardo, and John Stuart Mill. In lively and illuminating fashion, he shows how the business of buying and selling not only ignores the environment but is a major detriment to it. In other words, the "invisible hand" of the marketplace - the self-interest which Adam Smith said would produce the greatest benefit for society - amounts to a thumb in the eye of nature.

The essential problem, according to Davidson, is that the benefits of environmental protection - clean air, clean water, healthy forests and prairies - "are left out of the balance sheet entirely because they are too difficult or impossible to calculate." At the same time, the costs of such protection - cleaning up oil spills and other pollution, for example - are easy to calculate because they come straight out of profits. …

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