In my college days in mid-sixties, I was taught economics as a study of mankind in the ordinary business of life. It studies how a “man” gets “his” income and how “he” uses it. In those days, the male-centric worldview ignored the existence of woman as a distinct human entity, thus often excluded woman, her and she in English language usage. But she is no longer throttled to succumb to her identity as “second sex” due to gradual increase of gender sensitivity.
Likewise, in the process of evolutionary economics, the thinking around the subject has been including more components to make it relevant to fit with the emergent worldview. Its thinking is not bound to ordinary business of life only. It is more than that—extraordinary! It has not only to look at women, men and children in the space-ship earth but also to heaven wherein it has been sailing, of course, with more focus on immediate ecology for the survival interest of people in it.
It is true that economics as termed by Adam Smith is the science of wealth in the context of capitalism, private gain as driver of growth with benefits to others in the process of production, exchange, consumption and so on by the invisible hands in the free market mechanism. He has dealt in details with logic and evidence about productivity, division of labour, wages, rent, profit and so on.
The Wealth of Nations by Smith was published in 1776 at the beginning of industrial revolution in England. This revolution was so fundamental that it made mercantile economic theory inadequate to meet with the emerging requirement of industrialism and thus becoming as gradually dimming back burner. This classical economics emphasized on accumulation of wealth and growth to be a model for growth-centered capitalistic economy.
The capitalistic mode of production, exchange, distribution and consumption sprouted the growth vision in economics and development. The unfettered growth vision went to create the dynamics which could not be thought of at that time. Gradually over time humanity saw colonization of countries in Asian, African, American and Australian continents, two great world wars, two world-shattering communist revolutions in Russia and China.
Growth-centered economic and development vision had been prevailing as the dominant one. Even in the communist bloc, growth was viewed as the panacea to treat the socio-economic ills. In post-war Europe, the people were warned either to “produce or perish”. Governance and management were geared to increased production and growth as it began to manifest since the days of Adam Smith.
In 1966, in a thought-provoking and insightful article The Coming Spaceship Earth, Kenneth E. Boulding presented his economic thought which could be viewed as an antidote to growth-centric economic vision for the “cow-boy economics”. The cow-boys extract, produce, consume, waste, pollute and so on without giving due attention to the needs of the posterity. So, any decisions that adversely affect the finite earth system would be suicidal for human existence on earth and against the ground-breaking new environmental and ecological knowledge and wisdom.
So, his “spaceman economics” is grounded on the perception and belief that humans in this planet are space-people in the spaceship earth and they must behave in a manner compatible with the closed system unlike open one. Therefore, sustaining in a closed system depends on four “R” principles like recycle, recover, reduce and recover. This has been a paradigm-shift and the earth and above- the earth are no more infinite sources of virgin resource (except sun-ray) extraction and use, and also sinks for disposal and absorption of pollutants and wastes.
Such a paradigm-shift paved the way for influencing the decision-making and actions by the concerned stakeholders necessitating them to dig deeper into the mines of knowledge on sustainability for a sustainable spaceship earth. The Club of Rome brought out a book titled The Limits to Growth in 1972 and a subsequent book titled Beyond Limits by Meadows et el as a sequel to earlier one. All these played a pivotal role to think beyond the box, thus created the mindset of concerned people to challenge the infinite growth in a finite closed system.
As a consequence the exploitation of so called free environmental resources like air, water, soil and biological species is not free or very cheap, but is equal to the costs necessary to keep them to the norms set by the concerned regulatory bodies. Even the technologies which harm the ecology at the level of heaven are also discouraged by regulators and concerned others. The CFC technology responsible for creating ozone hole has been replaced by the environment friendly one. Now, environmental costs cannot be externalized for the sake of required good return on investment. Such costs are now needed to be internalized in accounting system while deciding on the price tag.
There are now books written on environmental economics which are included in the study of economics by the students, mainly in economics and sustainable development disciplines. A ground-breaking Doughnut Economics was expounded by Kate Raworth in 2017 with a model representing her concept on what should be the economics of 21st century. She explains and argues her concept with help of the image of a doughnut.
There are two rings of a doughnut—the inner ring is for social foundation and the other ring is for ecological ceiling and in-between is the safe and just space for humanity with regenerative and distributive economy. The shortfall in social foundation creates socio-political tensions and disturbances in the society whereas overshooting of ecological ceiling adversely impacts the life supporting ecological system of planet earth.
The economics of 21st century has to be a best fit to the needs of people in society and ecological ceiling in both earth and heaven. Doughnut economics is a compass for guiding actions of the concerned people. All disasters like ozone hole, global warming, climate chaos, etc. in the realm of heaven and ocean acidification, desertification, extinction of biological species, etc. on earth should be stopped and, when necessary, reversed. People in human societies across the planet earth should get the opportunity to thrive peacefully in harmony with nature. This economic model appears to be an effective means for caring people living on earth and under heaven with their care too.
The author is a columnist and vice-chairman of CDIP.