Recent ECOLOG dialog has revealed an interest in
the relationship between steady state economics
and ecology. To contribute to the discussion, we
have posted an excerpt from Chapter 7, "Don't
Sell the Farm: The Trophic Theory of Money",
from
<http://www.newsociety.com/Books/S/Supply-Shock>Supply
Shock: Economic Growth at the Crossroads and the
Steady State Solution by Brian Czech. In
addition, New Society Publishers is offering a
free download of Chapter 7 in its entirety for
members of the Ecolog list serve. Download your
free chapter
<http://newsociety.com/var/storage/blurbs/SupplyShock-Excerpt-Chapter7.pdf>here.
Additional Offer One Week Only - Ebook $0.99 for
the week of January 6-12 from major ebook retailers.
Chapter 7 demonstrates the relevance of a core
concept in ecology trophic levels to economic
policy. The trophic theory of money will help
guide ecologists and their NGOs in developing
economic approaches to conservation. With
leadership from ecologists (called "economists of
nature" by author Brian Czech), the trophic
theory of money should become a standard
consideration in the monetary policies of nations
concerned with environmental protection and resource conservation.
Excerpt from Supply Shock: Economic Growth at
the Crossroads and the Steady State Solution. (Figures not included)
The self-sufficient services fallacy is probably
the most common argument among those claiming
there is no conflict between economic growth and
environmental protection. It appears to be a
seductive argument for many people, especially
politicians and economists. That is because
equally many people (especially politicians and
economists) have not studied ecology, in
particular the concept of trophic levels.
The best way to demonstrate the concept of
trophic levels is with a simple diagram (Figure
7-1). Trophism refers to the transfer of energy
and nutrition from one organism to another in the
process of feeding. In the economy of nature,
only plants produce their own food, with the
process of photosynthesis. The growth of plants
is called primary production. All animal life
depends on the plant community for
nutrition. Some animals eat plants directly,
some eat animals that eat plants, and some eat
animals that eat animals that eat plants. Each
of these levels has a name: producers (plants),
primary consumers, and secondary consumers,
respectively. Species in the highest levels are
sometimes called super-carnivores; apropos for
the likes of lions, eagles, crocodiles, and sharks.
Sometimes the precise location of a species in
this system is nebulous. For example, a coyote
living in one geographic area may subsist almost
entirely on plant materials (grasses, tubers,
berries, nuts, etc.), while a coyote living in
another area may subsist primarily on small
mammals and birds. It becomes even more
difficult when some of the super-carnivores are
considered. In many areas during the spring,
grizzly bears are vegetarians. In many of the
same and other areas, they specialize in
harvesting salmon, which themselves are
predators. So in the course of a few months, a
single grizzly can go from being a primary
consumer to a super-carnivore. And of course
this can even happen during the course of a day,
as when the bear locates a productive berry patch
along the shore of an equally tempting salmon
stream. However, such difficulty in categorizing
species according to their trophic levels does
not reduce the applicability of this concept to
the human economy. In fact, it makes the two
economies even more analogous, as we will see.
In the economy of nature there are also a wide
variety of species that do not easily fit into
any trophic level at any time. These include
bacteria, worms, bumblebees, leeches
small
invertebrates, for the most part. These species
have odd ways of making a living. They neither
produce nor consume, at least not in a predatory
fashion. Some of them are parasites, but
virtually all are beneficial to the economy as a whole.
A large percentage of these species (myriad
bacteria, for example) make their living by
decomposing plant and animal materials that are
either too small, too spoiled, or otherwise too
indigestible for regular consumers. Were it
not for them, the earth would rapidly become a
heap of organic rubble. Some of them, like
bumblebees, consume minuscule amounts of plant
nectar. In the process, moving from flower to
flower, they pollinate these plants, and without
them many plant species would go extinct, eroding
the base of producers. Some of them, like
earthworms, consume undifferentiated organic
matter. In the process, they unwittingly till
the soil, making it more porous for water
infiltration and efficient root growth. All of
these types of species, in essence, provide
services to the economy as a whole. Depending
precisely on how you distinguish these service
providers from true consumers, they constitute a high proportion of species.
The human economy also consists of trophic
levels, as it were. This has been recognized in
some sense at least since the 1760s when Quesnay
set out to demonstrate that the true producers in
the human economy were farmers (Chapter
3). Farmers, in other words, comprised the
producer trophic level in the human economy,
although Quesnay did not put it in terms of
trophic levels. Later economists disagreed,
first arguing that labor applied in other
(non-agricultural) activities was also
productive, then arguing that capital itself
was. The arguments about what truly constituted
productivity among the likes of Adam Smith,
David Ricardo, John Stuart Mill, and Karl Marx
boiled down to a matter of semantics. Perhaps
such argumentation could have been avoided, or at
least relegated to an appropriately lesser notch
of importance, if only Quesnay had gone a step
further. The fact is that the farmers themselves
are not quite the ultimate source of productivity
either. Just as in the economy of nature, the
plant community itself best qualifies for the
title of source. Vegetarians or not, all
species depend on the plant community for
life. This will be so unless technology is
developed to create entirely synthetic foods, in
which case the consumers wont quite be human.
But in the human economy, most members do not
make their living by literally eating what exists
in the next lowest trophic level. Instead, the
bottom level consists of a variety of resources
that many humans harvest to make their
living. In addition to plants, these resources
include minerals, petroleum, fish, and - today -
even water (Chapter 1). Most of these resources
are not even living, so it would be inappropriate
to call the entire collection producers. Only
the plants actually produce their own food. And
some of these resources (fish, for example) exist
at a higher trophic level in the economy of
nature. Nevertheless, what these resources all
have in common is that they comprise the
foundation of materials upon which the rest of
the human economy is built. In ecological
economics, these materials are often called
natural capital. So the lowest trophic level
of the human economy is natural capital or, in
less fancier terms, land. This terminological
variety has the advantage of resonating with
neoclassical economists as well as ecologists, farmers, and common sense.
With natural capital at the base of the human
economy, the primary consumers are farmers,
loggers, miners, ranchers, oilmen, fishermen and
others who harvest goods directly from the
land. Among these primary consumers, the farmers
come closest to being true producers (à la
Quesnay) because they participate closely with the process of photosynthesis.
The manufacturing trades, on the other hand, are
clearly two steps removed from the foundation of
the economy (the natural capital), because they
harvest nothing. They use the raw materials
extracted by the primary consumers to manufacture
goods. They range from a heavy manufacturing
base (such as iron ore refining) up through the
trophic pyramid to the lightest manufacturing
sectors (such as computer chip
manufacturing). Heavy manufacturing requires the
rawest of materials, whereas much of the light
manufacturing can be done with raw, refined, or
manufactured materials flowing from lower in the trophic structure.
In the human economy, the service sectors
likewise defy placement in a particular trophic
level. Truck drivers, bankers, waitresses,
janitors, gravediggers; none produce or consume
in a systematic fashion that proceeds upward from
one trophic level to the next. The truck driver
may deliver a load of cotton from farm to factory
one day, and a load of fenceposts from factory to
farm the next. The banker may lend to the farmer
or to the industrialist. Waitresses wait on
farmers, industrialists, and bankers. Each contribute to GDP.
As described in Chapter 2, GDP is simply a
measure of the scale of human economic activity,
and it depends on how many humans are
economically active and how active each one
is. An analogy to GDP in the economy of nature
is the amount of biomass. Biomass is the sum total of living flesh.
The growth of biomass on Earth got off to a slow
and tentative start. The economy of nature
apparently started with a primeval soup in
which, by act of God or random chance, a chemical
reaction involving carbon apparently produced a
self-perpetuating and therefore living
form.[i] Some creation theorists attribute the
beginning of life to lightning, a sort of
biological big bang, which they say provided the
energy to catalyze this reaction. Perhaps in a
series of chemical experiments, various forms
of life blinked in and out of existence for
millions of years. As they say, the rest is
history, albeit natural history, and todays
global biomass is approximately 2,000 billion
tons.[ii] Its not increasing ad infinitum,
however. Rather, biomass and species diversity
have waxed and waned for the past 540 million
years, punctuated by 5 great episodes of extinction.[iii]
It bears emphasizing that the economy of nature
has not increased ad infinitum, nor was it ever
slated to. Neither is the human economy. In
fact, this is probably the right time to offer
readers a sound-byte, radio-friendly refutation
of perpetual economic growth. Youll win the
debate every time with this: To think there is
no limit to growth on a finite land mass (Earth,
lets say) is precisely, mathematically
equivalent to thinking that one may have a steady
state economy on a perpetually diminishing land
mass. In other words, we could gradually squish
the $70 trillion global economy into one
continent, then one nation, then one city
you
get the picture. Its becoming an information
economy, right? So eventually we could squish
it into your I-pod, leaving the rest of the
planet as a designated wilderness area!
Have you ever heard anything so ludicrous? Yet
its precisely, mathematically as ludicrous as
thinking that we could have a perpetually growing economy on Earth.
Lets look a bit more at biomass and then apply
some ecological principles to the human
economy. Biomass is analogous to GDP because, in
the economy of nature, virtually all activity is
economic, and no biomass is inactive. Unlike
certain stocks of manufactured capital, such as
sheetrock or fenceposts, biomass cant just sit
there idle. Of course there are shades of
exceptions, such as a hibernating reptile or the
bark of a tree, but in general the life of a
nonhuman is a perpetual struggle to obtain the
resources required for survival and
reproduction. Ecology, therefore, is primarily
about the allocation and distribution of
resources in the economy of nature. Ecologists are the economists of nature.
If the success of the human economy is measured
by its level of activity, or GDP, then presumably
the success of the economy of nature may be
measured by its level of activity. And that is
best measured by the amount of biomass. One may
wonder about the propriety of using biomass as a
measure of success. After all, what if we
compared 40 billion tons of algae and bacteria
with 40 billion tons of gorillas and
humans? However, this question does less to
negate the analogy than it does to negate the use
of GDP as a measure of success in the human
economy. GDP does not differentiate whether the
economy is one of poor tenant farmers and a
handful of wealthy landlords, or the diverse
economy that we currently experience. The useful
thing about GDP is that it does indeed provide a
gauge of the economys growth, regardless of
whether or not the growth is a good thing.
Theoretically, a growth in biomass may come
strictly from more plants, but growing biomass
typically means that the ecosystem is growing as
an integrated whole. Therefore, a growing
economy of nature means more consumers as well as
producers. Likewise, while growth in GDP could
theoretically come strictly from more farmers, a
growing GDP typically means that the economy is
growing as an integrated whole. Therefore,
economic growth means more manufacturing and services as well as more farming.
Success may also be viewed within various
subsets of the economy. We may say, for example,
that an increasing proportional contribution of
entertainment to GDP makes it a successful
sector, just as we may say that an increasing
proportional contribution of cervids (antlered
mammals) to biomass makes it a successful
sector. Viewed in terms of these subsets,
success seems like a more pertinent concept
than it does as applied to whole
economies. After all, the entertainment sector
grew because its employees successfully competed
with other sectors like the restaurant industry
for resources. Meanwhile the cervid sector
grew because its species successfully competed
with other sectors like bovids (horned mammals) for resources.
Finally this leads us to the implications of
trophic levels for perpetual economic growth
More information on the economic growth
implications of trophic theory and
self-sufficient services fallacy, can be found
in Chapter 7 of
from
<http://www.newsociety.com/Books/S/Supply-Shock>Supply
Shock: Economic Growth at the Crossroads and the Steady State Solution.
<file:///C:/Users/DAVIDI~1/AppData/Local/Temp/Chapter%207,%20%22Don't%20Sell%20the%20Farm:%20The%20Trophic%20Theory%20of%20Money.%22>DOWNLOAD
YOUR FREE COPY HERE
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