Some of you might find of interest this incredibly ignorant piece by one Robert Nadeau, “intedisciplinary scholar and historian of science” at GMU, published in March issue of Scientific American.
Nadeau seeks to discredit neoclassical economics by claiming that its scientific approach to describe human economic activities in relation to the “environment” was inspired and constructed on the basis of certain by now obsolete 19th century formulations of the law of conservation of energy and a theory of a “field of conserved energy that fills all space and unifies the phenomena of heat, light and electricity.” Nadeau then comes up with a list of in his views totally unwarranted neoclassical assumptions. It is not clear what connection 19th century theories of heat and electromagnetism have with such absolutely basic and unassailable assumptions as that “the market system is a closed system of production and consumption, with no inlets and outlets.” It is probably just a clever maneuver to furnish his arguments with the veneer of serious science. Certainly, such big names as Maxwell and Boltzmann cannot fail to impress.
Despite his scientific aspirations, Nadeaus’s own “scientific” litmus test for neoclassical economics allegedly “having no clothes” is, hold your breath, — the “environmental crisis” itself: “If the environmental crisis did not exist”, Nadeau writes, “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.”
Unfortunately, he fails to explain what those “environmentally responsible ways” are and why are they to serve as a standard for both positive science and economic policy. He concludes by saying that neoclassical economics “constitutes one of the greatest barriers to combating climate change and other threats to the planet.”
I am far from being a supporter of neoclassical economics on the issue of the environment or any other issues but this is a thinly veiled attack at economic science as such whose ultimate purpose is to explain and defend the overwhelming importance of production and consumption of wealth for human life and well-being. It is an attempt to divorce economics and management of nature-given resources from human needs as the foundation and standard of value and erect in its stead a standard of the well-being of the planet that must be protected from man-caused harm.
Nadeau apparently does not understand the basic nature of economics which places the subject’s life and well-being at the center of scientific investigation. Intrinsic theories of value have nothing to do with economics.