........it never was acceptable, but it is becoming direly urgent that economists understand the reality of our existence on this planet, or if they can't do this, they should quit, take up gardening, which may eventually teach them something valuable, and leave the job to others who can understand.

This has been a recurring theme for me for some years, but I give the matter its own place here because of articles published examining the world economic crisis by the Sunday Star-Times, written by Rod Oram. Understand that I think Rod Oram is a truly excellent economic commentator and reporter. He is often highly critical of some large businesses in New Zealand, Fontera for instance, and he has no time for the "Business Round Table" which is also something that reflects my long-held opinion. In the time coming up to the recent election (Nov 2008) he was very critical of National's economic policies, saying they were simplistic and backward looking. He has also frequently stressed the importance of environmental matters, such as Kyoto, pollution and environmental best practice as much from its effects on our economy and our good environmental reputation. He has a weekly spot on Kathryn Ryan's Nine-to-Noon programme, usually on a Tuesday after 10am, worth turning the radio on to hear, or downloading from the Radio NZ website. So, in my books, he's a good man.

However he is an economist, and unfortunately seems to share the inability of 99% of economists to recognise the reality of the limits of our planet to provide us with sufficient resources to fuel our ever burgeoning economic activity. This upsets me. Now, this is just the first part of three articles, the second appeared yesterday, and the last part, what we should be doing about the economic crisis will be published next weekend, but there is no indication that he will admit the place of the planet in our world economy in this future article. (I have made a very similar criticism of Gareth Morgan's 4000 word, three-part analyis of this crisis in the Dominion Post, but I was more upset by Rod's failure, because in most respects he is sympathetic to environmental concerns and social equity.)

I did e-mail Rod about this matter a couple of weeks before this article appeared, but I didn't get an acknowledgment, I didn't expect to, I'm just another crank, but obviously he didn't read it, or if he did, he didn't understand it. Perhaps if I were to be able to talk to Rod, he would deny that he was ignorant of reality, but if he wasn't, surely an article about our economic crisis, which is at least in part an environmental crisis, would have been a place to acknowledge this?

You can find the Sunday Star-Times article here, it's entitled "Four drivers, now four horsemen" (However as sometimes references do get moved or deleted eventually, I have copied it here, if needed.)

This failure of Rod to acknowledge the fundamental importance of oil depletion, and raw material shortages and price increases, all environmental issues, in his article of course prompted a letter. It wasn't published.

Dear Sir  / Madam

I generally find Rod Oram to be one of the sanest economic commentators in New Zealand. But I am distressed that his analysis of the causes of our present economic  crisis - financial innovations,  a sense of invincibility, inter-dependence and imbalances - entirely misses the fundamental cause, the one which no conventional economist will ever acknowledge. It is called reality. The reality of our existence, as a highly developed primate, on a bountiful, but finite, planet. It's astonishing that Rod can write 1,121 words about our world economy without once mentioning this reality. What explanation does Rod attempt for soaring oil and raw material prices up to July 2008? None at all. But it was then that we first glimpsed the Club of Rome's "Limits to Growth", the collision between humanity's perpetually expanding perceived needs and the reality of the planet's ability to provide for them.

If one of humanity's most sane and intelligent members cannot understand this, what hope then is there for us all, living in this parallel universe of childish wish-fulfilment, while our real world suffers ever more direly from our pathological attachment to the unattainable? Rod, by your omission, you are truly frightening me. 

Yours faithfully,

I have written about economists in a previous article (go to the bottom of the page) and mentioned my theory that the man who chopped down the last tree on Easter Island was almost certainly an economist. But that post to my blog was four years ago, and it seems that economists have made no progress in these vital environmental matters.

There are such people as environmental economists. According to a Wikipedia article on Environmental Economics the central concept of environmental economics is the concept of "market failure",

"A market failure occurs when the market does not allocate scarce resources to generate the greatest social welfare. A wedge exists between what a private person does given market prices and what society might want him or her to do to protect the environment. Such a wedge implies wastefulness or economic inefficiency; resources can be reallocated to make at least one person better off without making anyone else worse off."

According to Wikipedia there are also such people as ecological economists. The difference between the two is that environmental economists are trained economists who have specialised in environmental concerns, and use the conventional economic tools to analyse their subject, whereas ecological economists are ecologists who gain expertise in economics, and their tools are those of the science, and an underlying assumption that the economy is a strict "subfield" of ecology, i.e. the economy is a wholly owned subsidiary of the environment - I think I might have said something similar previously? Ad nauseam? And it occurs to me that at least ecologist are trained in science and scientific theory, economists aren't, the basis of economics is human behaviour, a social science, subject to fashion and fad, to highjacking to extreme interests and dogma, and is much less robust than pure science, which can make robust predictions, whereas economists have great difficulty doing this. There is an International Society of Ecological Economists, their website is http://www.ecoeco.org The environmental website, Grist, has an article on ecological economists, they are described as "mavericks" and it is said they are persona non grata in Universities and policy-setting institutions.

Herman Daly, who wrote "Beyond Growth", is the guru of ecological economics, he was once a member of the world bank, and is now one of its most effective critics. He is said to have coined the term "unecomic growth". There's an interesting article available on line, for free, published in the Scientific American in Sept. 2005. Entitled "Economics in a full world" its preamble says this: "The global economy is now so large that society can no longer safely pretend it operates within a limitless ecosystem. Developing an economy that can be sustained within the finite biosphere requires new ways of thinking " This statement echoes the UN Millennium Ecosystem Assessment and Report, and its stark warning. "Human activity is putting such a strain on the natural functions of the Earth that the ability of the planet's ecosystems to sustain future generations can no longer be taken for granted." I have covered this report elsewhere. It is the most important document published in the world in this century, yet most people will be utterly ignorant of its existence and the warnings it contains. I have previously suggested that a copy should be posted to every household in New Zealand. Another article, in the New Scientist, from Oct. 2008 by Herman Daly is "Economics blind spot is a disaster for the planet" and accompanies a special report on "sustainable growth", though this might seem to be something of an oxymoron. An article entitled "Why politicians dare not limit economic growth" continues the theme, which has been a major concern of mine, examined on a number of my postings on this site over the years.

I think it would be true to say that I have never ever seen in the papers, or on the radio or TV a single comment in regard to our present economic crisis by either an environmental or ecological economist. 100% we are given the opinions of those who only understand our present way. You would have thought this might have given pause for thought, as to why exactly are we now having the problems we are, why were they not predicted by those very people who claim expertise in commentating on it, and is it likely that desperately trying to resucitate the economy to return it to where it was is going to cure the problem, when the economy as it was was the cause of the problem in the first place? Isn't the logic of this unassailable or am I missing something?

We continue to live in a parallel universe, partly created and sustained by our media, where such discussion is as impossible for us as it would be for a two dimensional creature to discuss the meaning up "up and down". This inability to even frame the question is a form of intellectual corruption - a denial of our right to intellectual challenge and debate. And like all corrupt institutions, allowed to continue, it will fester and infect the whole body politic. There is no hope for us getting out of our present economic difficulties until we understand the realities of our predicament. Nothing other than a revolution in thinking, such as the Renaissance or the Age of Enlightenment, will suffice. There's no need for anyone to get hurt in this revolution, but the likelihood is, continuing our present corrupt ways, that the revolution we will get will more resemble the French or Russian ones.

So sorry, Rod Oram, I admire you in many ways, but in this instance, your apparent inability to acknowledge reality, your two dimensional response to a three dimensional question, is a fundamental flaw in your reasoning, and in your analysis. What will it take for you, and all the other economists, to understand this?