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The aim of an economy should . . . . .

from Clive L. Spash and Clíodhna Ryan and RWER issue 106

The aim of an economy should not be to grow so that a welfare State can be funded to ameliorate the social, health and ecological impacts of growth, but rather to engage directly in social provisioning that avoids exploitation and deliberate harm. Long ago, Kapp (1970) emphasised the social ecological imperative for reorienting economics towards policies addressing needs, the requirements of human life and social minima. This remains largely off economists’ agenda, along with the topic of transforming economies away from divisive, destructive, exploitative, unjust and unethical provisioning systems.

 

A more foundational economic analysis is required that links to the physical basis of the system. Thus, the concept of social metabolism has been developed as an analogy with biological metabolism, which emphasises the material and energy inputs (resource extraction) and outputs (waste sinks) of any society (Krausmann 2017). Societies structured to reproduce on the basis of growth and accumulation continually seek to increase the use of material, energy and labour and so inevitably violate limits (Spash 2017: 12). The basic laws of physics (conservation of mass and energy) mean the exponential growth in extraction of primary resource stocks, and filling of primary sinks in the biosphere, are fundamentally unsustainable. Increased scale of production means the size and pace of the economy continually challenges ecosystems’ structure and functioning. It also means innovative new materials are continually introduced that have qualitative impacts and replace naturally sustained functions with artificial processes that require ongoing human management and intervention and so more material and energy inputs (Giampietro 2019).

  1. energyasnumeraire
    January 25, 2024 at 11:07 pm

    Giampietro is right.

    And in addition to his general critics I would like to add, that, from physical perspective, You need a stable and well defined unit, based on a defined given natural characteristic of the measurable subject, to start any kind of real world discussion of something related to growth or of some arguments of unsustainability.

    To manage or to steer something, you need to be able to measure it.

    Measuring in relative terms, in monetary units, is not measuring. It is a believe of some kind of observation combined with fantasy.

    Any economic theory based on the accounting of whatever kind of “general social product” in non physical related and well defined characteristics has a huge flaw build in.

    It is necessary – and possible – to embed each kind of GDP accounting into physical reality.

    It shall not replace the monetary accounting, it shall accompany the monetary accounting. It shall replace the basket of good of daily use for the inflation rate observation by a physical given characteristic of the total sum of any and each single part of the GDP.

    The question to be asnwered: Money is relative, but relative to what?

    (and what means, what kind of physical given characteristic contained in absolutely every single part of any kind of GDP part product and as well any GDP part of service delivered. That is the question.)

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