The Origins of Ecological Economics: the Bioeconomics of Georgescu
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The origins of ecological economics In recent years, an increasing awareness of resource and environmental issues has created a demand for ecological economics, and a growing interest in the work of Nicholas Georgescu-Roegen. This book connects Georgescu-Roegen’s earlier work on consumer choice theory and critique of the Leontief dynamic model with his later ambitious attempt to create a theoretical alternative to neoclassical economics, ‘bioeconomics’. The book includes detailed examinations of the following subjects: • Reformulating the consumer choice theory for environmental valuation. • Investigation on a Leontief dynamic model with two delays. • Measure of information and its relationship with entropy in physics. • Relations among energy analysis, Sraffa’s analysis and Georgescu-Roegen’s production model. • The viability of solar technology. • Economic and thermodynamic analysis of land since the Industrial Revolution. • Development, environmental degradation and North–South trade issues. • Robert Rosen’s modelling relation and the biophysical approach to sustain- ability issues. This work may serve as a source-book for research into solid theoretical bases and applications related to sustainability issues. It will prove essential reading for ecological economists, but will also be of interest to ecologists, economists and social theorists in general. Kozo Mayumi graduated from the Graduate School of Engineering, at the Department of Applied Mathematics and Physics of Kyoto University. Between 1984 and 1988 he studied under Professor Georgescu-Roegen. Mayumi is now a full professor at the University of Tokushima. His research interests include energy analysis, ecological economics and complex hierarchy theory. In 1999 he edited Bioeconomics and Sustainability: Essays in Honor of Nicholas Georgescu- Roegen, and he is currently an editorial board member of Ecological Economics and Population and Environment. Routledge Research in Environmental Economics 1 The Origins of Ecological Economics The Bioeconomics of Georgescu-Roegen Kozo Mayumi The Origins of Ecological Economics The bioeconomics of Georgescu-Roegen Kozo Mayumi London and New York Firstpublished2001 byRoutledge 11NewFetterLane,LondonEC4P4EE SimultaneouslypublishedintheUSAandCanada byRoutledge 29West35thStreet,NewYork,NY10001 RoutledgeisanimprintoftheTaylor&FrancisGroup This edition published in the Taylor & Francis e-Library, 2002. ©2001KozoMayumi All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Mayumi, Kozo, 1954– The origins of ecological economics : the bioeconomics of Georgescu-Roegen / Kozo Mayumi. p. cm. Includes bibliographical references and index. 1. Georgescu-Roegen, Nicholas. 2. Economists–United States. 3. Environmental economics. 4. Human ecology. I. Title. HB119.G43 M39 2001 333.7–dc21 00-054740 ISBN0-415-23523-5 (Print Edition) ISBN 0-203-46870-8 Master e-book ISBN ISBN 0-203-77694-1 (Glassbook Format) Contents List of Figures vii List of Tables viii Preface ix Acknowledgements x 1 Introduction 1 2 Foundations of consumer choice theory for environmental valuation in view of Georgescu-Roegen’s contribution 7 3 Conditions for balanced sustained growth of the open Leontief dynamic model and investigation on a Leontief dynamic model with two delays 21 4 Information, pseudo-measures and entropy: an elaboration on Georgescu-Roegen’s critique 32 5 A critical appraisal of two entropy theoretical approaches to resources and environmental problems: Georgescu-Roegen and Tsuchida 45 6 Embodied energy analysis, Sraffa’s analysis, Georgescu-Roegen’s flow–fund model and viability of solar technology 65 7 Land: Achilles’ Heel of ecology and economy 79 8 Environment and North–South trade: another view 97 9 Modelling relation, hierarchical systems and bioeconomic approach to sustainability issues 108 vi Contents Appendix A: Integral curves around a saturation point 126 Appendix B: Conditions for balanced sustained growth of the open dynamic Leontief model 130 Appendix C: A Leontief dynamic model with two delays 139 Notes 142 Bibliography 145 Index 156 Figures 2.1 Integral curves around the saturation point 10 2.2 Probabilistic binary choice scheme 16 2.3 Hesitation regions and intransitivity 17 3.1 Domain of balanced sustained growth 24 3.2 Open dynamic Leontief model: (a) balanced sustained growth case and (b) imbalanced case 25 3.3 Numerical result for a dynamic Leontief model with two delays 29 3.4 Numerical result for a dynamic Leontief model with two delays for case (c) in Fig. 3.3 30 4.1 Tsuchida’s apparatus 40 5.1 The nested-hierarchical structure of an open steady-state system of the second category 51 5.2 Diffusion of matter 55 5.3 The mixing entropy 62 5.4 The relationship between energy density and the amounts of material requirement 63 6.1 Comparison of solar energy for cases in Tables 6.2 and 6.3 76 6.2 Comparison of solar energy: prices for cases in Tables 6.3 and 6.4 77 6.3 Comparison of collectors: prices for cases in Tables 6.2 and 6.3 78 9.1 Modelling relation 111 9.2 Theoretical simile 112 9.3 Parallel allocation of exosomatic energy and human time 117 9.4 The double autocatalytic loop: (i) human time; (ii) exosomatic energy 123 A.1 Integral curves of Georgescu-Roegen’s solution 127 Tables 5.1 The economic process according to the energetic dogma 60 6.1 The aggregated economic process 70 6.2 Flow–fund matrix of a viable solar technology 72 6.3 Flow–fund matrix of solar collectors produced by solar energy 73 6.4 Flow–fund matrix of the present mixed solar technology 73 Preface This book by Kozo Mayumi deals most ably with crucial analytical and policy issues in ecological economics. A new perspective is presented in this book on the relations between the ‘young’ and ‘mature’ Georgescu-Roegen, i.e. the relations between his work on consumption theory and on the entropy law and the eco- nomic process. A profound analysis disposes of the notion of negentropy being equivalent to information. Also, Georgescu-Roegen’s discussion of feasible and viable technologies is scrutinized and formalised in the context of an evaluation of solar technologies. In another chapter, an intriguing discussion of Clausius’ notion of disgregation of matter leads to revaluation of Georgescu-Roegen’s apho- rism against energeticist dogmas: ‘matter, matters too’. Some historical chapters deal with the land constraint in the era of fossil fuels, which is still not only relevant for agricultural production but increasingly also as a carbon sink. There is a chapter on some technical issues in Leontief’s dynamic systems, and a new discussion is introduced on the relations between the Sraffian system and Georgescu-Roegen’s flow–fund models (here I would emphasize the distributional aspects, i.e. whether the profit rate does not only depend on the ‘class struggle’, as in Sraffa, but also on the outcome of ecological distribution conflicts). Kozo Mayumi was a student of Georgescu-Roegen in the 1980s. He has also been influenced by the Japanese entropy school, particularly by Tsuchida, and in this book he explains clearly the role of the water cycle in disposing of an enormous amount of solar energy input. Moving beyond Georgescu-Roegen, he also deals with reflexive systems or anticipatory systems, where the future affects the present, which is a way of introducing uncertainty and complexity. To a large extent, the book is then a continuation, critique and expansion of Georgescu-Roegen’s work. Is Kozo Mayumi an economist, a physicist, or a systems theorist? The reader might well wonder. What Georgescu-Roegen (1906– 94) called ‘bioeconomics’ has come to be called ‘ecological economics’. This is a growing transdisciplinary field and Kozo Mayumi is indeed one of its most competent representatives internationally. Joan Martinez-Alier, Universitat Autonoma` de Barcelona Acknowledgements This monograph results from research that started in 1984 during my graduate study at Vanderbilt University in Nashville. As a thousand words will not suf- fice to describe my respect and thanks to the great scholar, I can express my acknowledgements to my teacher, Prof. Nicholas Georgescu-Roegen, only in a most abstract way: Georgescu-Roegen never stopped revising his economic the- ory. Georgescu-Roegen’s theory is a critique from within the conceptual edifice of economics which he himself helped build. It was a privilege to be guided by Georgescu-Roegen, the finest scholar I have ever been privileged to meet. Prof. Joan Martinez-Alier of Universitat Autonoma` de Barcelona kindly agreed to write a foreword to this monograph. Prof. Martinez-Alier has invited me to Barcelona to take part in several stimulating workshops on integrated environmental assessment. It has been my pleasure to work with Dr. Mario Giampietro of Istituto Nazionale di Ricerca per gli Alimenti e la Nutrizione and Prof. John Gowdy of Rensselaer Polytechnic Institute. Chapters 8 and 9 are a result in part from joint work with Dr. Giampietro. I must acknowledge Dr. Giampietro’s seminal role in developing methodological tools using hierarchy theory in Chapter 9. Chapter 2 is a result in part from joint work with Prof. Gowdy. I would like to express my debt to these two great friends and my thanks to them for allowing reproduction of our joint work in this monograph. I would like to express sincere thanks to Mr. Don Sturge of the University of Tokushima for his tremendous help in improving the language in this monograph. I would like to express my sincere thanks to Prof. Hasegawa of Nanzan Univer- sity, my former supervisor at the Department of Applied Mathematics and Physics of Kyoto University, for continuous moral support and encouragement.