Political Economy of the Environment
Paper Session
Friday, Jan. 3, 2025 10:15 AM - 12:15 PM (PST)
- Chair: Nicholas Reksten, University of Redlands
Comparing the Ecological Thinking of Marx and Veblen
Abstract
Karl Marx and Thorstein Veblen have often been compared and contrasted, but seldom for theirwriting on environmental issues. This oversight appears to be more the result of the economics
profession’s general ignorance of ecology than a lack of writing on the subject by Marx or
Veblen. Interestingly, given that they were writing more than a century ago, both Marx and
Veblen were exceptional in their awareness of the relationships between the economy, society,
and the natural environment. Marx and Veblen each developed unique methodologies and
models, took very different career paths, and described different societies and times, and these
differences certainly complicated comparisons. Nevertheless, despite the differences it is clear
that the two agreed that the capitalist system was causing humans to often deal with nature in
destructive and exploitative ways. Whether we call it capitalism or simply American business
culture, a system based on private property and endless profit-driven accumulation was seen by
Marx and Veblen as the cause of irreparable damage to nature. Also, they both foresaw the
inevitable ecological destruction as a powerful dialectic force for change. However, Marx
expected the change to come in the form of a socialist revolution, but Veblen feared a more
fascistic turn of events. We conclude by discussing the relevance of these different evolutionary
perspectives for our contemporary world. The fact that environmental issues are being
successfully exploited by right-wing political movements might, were they still alive, surprise
Marx but certainly not Veblen.
The Green Transition as an Economic Boom
Abstract
Standard neoclassical macroeconomic models of climate change, like Nordhaus’s DICE model and other integrated assessment models (IAMs), have focused on the costs of the climate transition, where the costs of reduced material consumption are weighed against the benefits of decarbonization in terms of reducing externalities. This understates the benefits of technical progress and capital accumulation in terms of accelerating economic growth, in additional to the benefits of the green transition in avoiding the large costs of climate change. I consider the effects of faster productivity growth in green technologies in a variety of growth models, including demand-led growth models, the Harrod-Domar model, and Solovian approaches. These show that the green transition would result in an economic boom, a very different result that the significant costs of foregone consumption required for decarbonization in IAM models like DICE.Financial, Democratic and Institutional Challenges of the Ecological Transition. What Matters Most?
Abstract
The ecological transition often hinges on arguments surrounding the cost of financial transformation. Mainstream economists advocate for a shift toward green finance, coupled with ecological regulations, carbon pricing, and the belief that this will suffice (OECD 2016, Nordhaus 2019). However, many heterodox economists posit that traditional financial systems lack the capacity for such a dramatic shift, emphasizing the need for deeper structural changes in finance, often including alternative monetary policies centered on money creation (Olk et al. 2023, Couppey-Soubeyran et al. 2024).This contribution argues that the ecological transition is less a matter of financial resources and more about allocating physical resources and human labor towards goods and services that may not provide immediate consumer gratification. From this perspective, the primary challenge lies not in technical or financial limitations, but in democratic considerations. Other questions need to be addressed by researchers. How can we organize a new economic model, emphasizing ecological investment over consumer comfort, without necessarily resorting to global degrowth? How can we make this economic shift socially acceptable, minimizing the potential for populist counter-movements?
This paper explores these questions by developing a conceptual framework rooted in an institutional perspective. It will analyze the current neoliberal system and propose potential institutional transformations that could foster an economy that prioritizes environmental well-being and social welfare.
Marxist Utopian Dreaming: A Reconsideration of Socialism, Utopian and Scientific
Abstract
This paper critiques the famous argument by Engels in Socialism: Utopian and Scientific that Marx had developed a scientific socialist alternative to the unrealistic dreaming of earlier utopian socialists. I argue that while Engels’ critique of his socialist forbearers is compelling and his claim that Marx had unlocked the mysteries of historical evolution is half-correct, his and Marx’s own conceptions of socialism are dangerously unrealistic. I make this claim for three reasons. First, Engels’ blithe argument that economic life can be organized based on a democratic popular plan overly simplifies the complexity of economic organization and grievously misleads advocates of socialist organization. Second, the implicit rejection of the proposition that market-generated prices provides important signals that guide the allocation of inputs and outputs makes economic coordination even more difficult. Third, Engels’ correct focus on class conflict as a fundamental driver of historical evolution in the contemporary period neglects other important sources of social contradiction. Thus, the assumption of a quick convergence of a post-revolutionary population to the adoption of solidaristic norms is unwarranted.The paper concludes with general comments on the importance of basing our conceptualizations of socialist possibilities on empirically sound understandings of contemporary socio-economic life.
JEL Classifications
- Q5 - Environmental Economics
- B5 - Current Heterodox Approaches