Australasian Science: Australia's authority on science since 1938

Economics on an Even Keel

By David Tranter

Can economics balance its books with the limits of ecology?

The 1850s terms “ecology” (the science of nature’s household) and “economics” (the wise use of scarce resources) have drifted apart, ecology investigating the resources of nature and economics the nature and growth of wealth. Since then, species have been extinguished in the name of “development”, fossil fuel capital has been burnt faster than it was ever generated in nature, the global climate has been destabilised, the population of the world has increased fivefold, and powerful nations have appropriated the riches of the weak, who are now taking to the sea in unseaworthy boats to seek their rightful share of “western” affluence. Has wisdom itself become a scarce resource?

Development is not the same as growth. Development is a qualitative, not a quantitative, process. Buds develop into flowers, pupae into butterflies, looms into computers, and computers into the world wide web. The term “development“ is a misnomer that hides a multitude of sins, and “sustainable development” is more often than not a contradiction in terms.

Unregulated growth is not normal in nature; it is limited by the resource in shortest supply (Law of the Minimum). Individuals, populations, communities and ecosystems are regulated by involuntary feedback, like the outriggers of Polynesian canoes that keep them “on an even keel” or like household thermostats that stabilise the temperature. Self-regulation (“homeostasis”) is not some spooky, metaphysical concept; it’s what’s known intuitively as “the balance of nature”.

Those populations that continue to grow, such as cancer cells, end up devouring their host, at which point they run out of resources and are extinguished. Unless we human beings are some ethereal species unconstrained by nature’s laws, we are vulnerable to the same fate. Growth can be a risky game unless it is self-regulated.

But we are indeed part of nature. For instance, mitochondria were once thought to be “self” but are instead primeval chemical bacteria that gathered together in cooperative symbioses that enhance their livelihood. Cooperation is a part of what it is to be human; without it we are nothing.

A weakness of our current economic system that “measures the cost of everything and the value of nothing” is that it ignores the invaluable contributions of housewives, volunteers and “ecosystem services” such as clean air and water as if they are valueless. The current model needs to be replaced with one that fits the facts.

But economics, unlike science, is not subject to rigorous peer review. If the facts don’t support the current scientific theory, scientists replace it with one that does. By contrast, if the facts don’t support the prevailing economic theory, economists tend to assume that the facts must be wrong.

Economics is not carved in tablets of stone, inviolate; it is the creation of mankind and, if found wanting, it can be replaced with a wiser one. So what can nature teach us about the wise use of scarce resources?

First, that steady-state economies are not necessarily stagnant. They can be as luxuriant and diverse as coral reefs and rainforest ecosystems, which flourish in nutrient-poor environments, the few resources they have being immediately utilised and recycled. The red crabs of the Christmas Island rainforest, for example, watch each falling leaf and eat it before it hits the ground.

Second, that escalating growth is a very risky game unless it is self-regulated.

Economics can be sustainable given knowledge rather than ignorance; nous rather than hubris; productivity rather than production; innovation rather than growth; fair trade rather than free trade; recycling rather than waste; renewable rather than fossil fuel energy; self-regulation rather than cyclic booms and busts; and cooperation as well as competition. If economics fails the challenge, humanity’s brief span on Earth is likely to have been a mere spark in the fabric of time, like the flash of a firefly in the night.

As T.H. Huxley observed over a century ago:

The chessboard is the world. The pieces are the phenomena of the universe. The rules of the game are what we call the rules of nature. The player on the other side is hidden from us. We know that his play is always fair and honest. But we also know, to our cost, that he never overlooks a mistake or makes the slightest allowance for ignorance.

David Tranter OAM is is a retired CSIRO Ecologist (Fisheries and Oceanography) with an Order of Australia for community work in environmental conservation.