Homer-Dixon Connects Economics to Ecology

Thinking about alternatives to the growth imperative means thinking about alternatives to conventional economics -- an elaborate apparatus of assumptions, theories, and empirical research that reinforces the legitimacy of globalized capitalism and the power of the world's capitalist elites. At the heart of this view is the assumption that the economy is separate from nature and operates much like a machine. The machine's behavior is linear, predictable, and reversible, so it can be managed by a planet-wide class of technocrats -- including central bankers and government officials -- trained in the arcane science of economics. An alternative theory would recognize that the economy is intimately connected with nature and its energy flows. This larger economic-ecological system often doesn't act like a machine at all. Instead, its behavior is path dependent, marked by threshold effects, and often neither predictable nor controllable. An alternative view would also recognize there are no good substitutes for some of the most precious things nature gives us, like biodiversity and a benign climate. Because we can't adequately replace these things with something else once they're gone, we need to create ways of giving them explicit economic value so people will have an incentive to protect them. Such an alternative view, if developed in detail, would help everyone understand that conventional economics is not unchallengeable truth but rather a particularly potent ideology -- a blend of scientific finding, analytical gymnastics, value judgments, and self-congratulation.

--from p. 293 of Thomas Homer-Dixon's The Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization.