The article says that standard neoclassical economics (NCE) says that:
* The market system is a closed circular flow between production and
consumption, with no inlets or outlets.<
This is not an inherent part of NCE: the closed circular flow is
usually about exchange-value, not use-value. At least that's true in
macro.
* Natural resources exist in a domain that is separate and distinct from a
closed market system, and the economic value of these resources can be determined
only by the dynamics that operate within this system.<
This, on the other hand, seems quite typical of NCE in practice. I
don't know if it's a necessary aspect of NCE in theory, however.
* The costs of damage to the external natural environment by economic activities
must be treated as costs that lie outside the closed market system or as costs
that cannot be included in the pricing mechanisms that operate within the
system.<
This does not seem typical. If damage to the "external" natural
environment changes costs, it has an impact on the market and on
prices. Practitioners of NCE would in fact argue that the costs of
damage to nature _should_ be treated as costs. Internalizing
externalities and all that.
* The external resources of nature are largely inexhaustible, and those that
are not can be replaced by other resources or by technologies that minimize the
use of the exhaustible resources or that rely on other resources.<
This view does not arise from the basic framework of NCE. Instead, it
comes from optimism about the efficacy of the price system, something
embraced by the (currently-dominant) right wing of NCE as opposed to
the left wing of that research program, which sees "market failure" as
common if not ubiquitous. (In the latter perspective, the Invisible
Hand needs the government's Helping Hand.)
The right-wing's optimism, by the way, is based on the political
ideology of _laissez-faire_, which is distinct from NCE (though the
two sets (NCE and LF) have a big overlap). It also leads to the
assumption that exchange-value (price) is the best measure of
use-value.
* There are no biophysical limits to the growth of market systems.<
I don't know who says this. But it's possible some do.
If the environmental crisis did not exist, the fact that neoclassical economic
theory provides a coherent basis for managing economic activities in market
systems could be viewed as sufficient justification for its widespread
applications. But because the crisis does exist, this theory can no longer be
regarded as useful even in pragmatic or utilitarian terms because it fails to meet
what must now be viewed as a fundamental requirement of any economic theory—the
extent to which this theory allows economic activities to be coordinated in
environmentally responsible ways on a worldwide scale. Because neoclassical
economics does not even acknowledge the costs of environmental problems and the
limits to economic growth, it constitutes one of the greatest barriers to
combating climate change and other threats to the planet. It is imperative that
economists devise new theories that will take all the realities of our global
system into account.<
This is much too abstract. If people want to talk about the inadequacy
of NCE (as they should!), they must present an alternative. It's not
enough to trash a theory, even if one's criticisms are totally valid,
if the alternative is the null set, intellectual anarchy, crude
empiricism, scholasticism, or religion.
BTW, why is it okay to show a picture of a man's butt, but not a woman's?
