Proposed Public Statement by Concerned Economic Thinkers

NOTE: This is my proposal for a public statement by concerned economic thinkers who understand the urgent need to develop a sustainable economic theory.

Frank Rotering
March, 2022

The undersigned are economic thinkers who are deeply concerned about the ecological crisis.  Our shared view is that a new economic theory must be quickly developed, for two reasons: to guide present humankind to a sustainable future if collapse can be averted, and to help surviving humankind reconstruct societies on a sustainable basis if collapse occurs.  Although mainstream economics has many useful features, it cannot achieve these critical ends.

The fundamental problem with mainstream thought - which includes both standard and heterodox theories - is that it reflects capitalism's economic logic.  This logic strives for maximum profits and growth, and it treats natural sources and sinks as unlimited.  Given the environment's catastrophic decline, we categorically reject these premises.  In our view the new theory must be based on the following principles:

  1. The economy's goal is sustainable well-being. An economy cannot violate environmental limits, and it must maximize human well-being as this is socially defined.
  2. Use-value is objective, not subjective. Mainstream economics values outputs based on the strength of consumption desires by those with the capacity to pay.  A sustainable theory would value outputs based on their contributions to objective well-being.
  3. Needs are distinguished from wants. The mainstream places all final outputs in the same category: commodities to be consumed.  A sustainable theory would distinguish between final outputs that satisfy needs by improving health, and those that satisfy wants by enhancing life enjoyment.
  4. Natural sources and sinks are sustainably allocated. Formal methods must be developed to utilize natural sources and sinks so that environmental limits are fully respected while well-being is maximized.

The theory we propose has a restricted role: to help analysts establish rational economic objectives based on the goal of sustainable well-being.  It must therefore be supplemented by a modified form of mainstream economics that addresses the economy's operations.  We emphasize that our opposition is not to mainstream thought as a whole, but rather to the extension of its role beyond functional analysis into the guiding realm.

Similar considerations apply to capitalism.  Although we reject the system's ecocidal logic, we broadly support many of its institutions.  Capitalism's markets, monetary systems, regulatory methods, legal infrastructure, etc. are not necessarily damaging to the environment, and should be selectively retained in suitable forms.  Society's familiarity with these institutions will likely facilitate the transition to a sustainable economy.

We plead with concerned economic thinkers to immediately begin work on a sustainable economic theory, and to modify mainstream economics as indicated.  Given the severe time constraints, we strongly recommend that an existing proposal, the Economics of Needs and Limits (ENL), be used as the starting point for the new theory's development.

 

(Signatories)