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.
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And that is without even mentioning that most of the environmental problems has more to do with how property rights are assigned. I heard that in the 19th century, governments actively promoted the building of factories without concerns for the environment because at the time, it was necessary for the country’s development. Of course, that is a fact that is rarely if ever pointed out.
And that is without even mentioning that most of the environmental problems has more to do with how property rights are assigned. I read that in the 19th century, governments actively promoted the building of factories without concerns for the environment because at the time, it was necessary for the country’s development. Of course, that is a fact that is rarely if ever pointed out.
I agree that Nadeau’s conclusions are faulty, but it’s interesting that he calls for an interdiciplinary approach to economics. What he’s essentially bemoaning is that mainstream economics as taught on an academic level has become the intellectual equivelant to reading chicken bones. On this level, there really can be no disagreement with someone who understands mathematics.
Political Economy does take that interdiciplinary approach. And it has been through the oppressive discourse of econometric modeling that economics discouraged the necessary epistemic check that philosophy provides to the body of knowledge. Just as quantum phyics provides the epistemic check on scientific knowledge.
In short, philosophy departments allowed themselves to backed into a corner by the economics departments.
This reminds me of Marxist polylogism.
“But because Capitalism 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 socially useful ways on a worldwide scale.”
Reading the article, it is obvious that the author believes people “follow” a certain economic theory to produce and trade goods, instead of the theory explaining HOW people produce and trade. So under this false assumption he pretends we all follow a different economic theory that includes environmental impact. This is nothing more than pseudo-scientific thinking. The worst part is that most of the replies tend to agree with the article, and even find it to write tirades against capitalism. makes you wonder about Scientific American’s readership and their level of scientific illiteracy, when they can’t even detect the author’s circular thinking!
Actually he’s much more coherent than the article makes him out to be. Wrong — but coherent. Economics has plenty to do with the laws of physics. If the universe were not the way it is (or at least, the way it appears to be), then economics wouldn’t be the way it is either. If we could get the universe to give us “something for nothing” then all goods and many services would truly become “non-economic”.
Now of course this isn’t true, as far as we’ve ever been able to ascertain. Mass-energy is conserved, and the laws of economics hold sway over everything. “The environment” is no exception to this as several commenters have handily pointed out. But it’s not _that_ hard to get from A to B in Nadeau’s logic if you make the appropriate errors early on
This shall be printed, in large print, on the finest parchment and posted, in a suitable frame, in my office. Ah, how the pinkos shall swoon…
Thanks, Nasikabatrachus.
“Baby.” “Bathwater.”
interdisciplinary scholar
(No “quotations” necessary. No need for capitals either, but then I am not an editor…)
Just for the record: interdisciplinary study is a very noble and valuable way to do research, even if you happen to disagree with this particular person.
I just so happen to be an interdisciplinary guy AND a Misesian. Oh, and I love this site! “99% of the Time.”
“… published in March issue of Scientific American.”
Say no more. SA often publishes economic drivel. For example an article saying the Marx was right, and praising Marxism.
I have read elsewhere that early economists, in their zeal to establish economics as a science started with physics models and substituted economic criteria. I am not sure if this is true, but I am certain that economics and natural laws are interwoven.
More concretely I am certain that our economy is a subset of the biosphere and not the other way round.
I see no evidence that non-renewable natural resources are correctly valued. Scarcity is measured over seconds or perhaps at the outside over a few years. If the age of oil is 1930-2030, as appears likely, what happens then?
I also see no evidence that renewable natural resources are correctly valued. Fisheries are collapsing, pollution is extensive and there is evidence of widespread environmental degradation.
Net energy is alien to most economists, however it is possibly the key issue that confronts us today. Wealth, after all is only a claim on labour, past or future. Labour is just the performance of work and that also happens to be a reasonable working definition of energy.
ok, so buy aquafarming, water management, agribusiness and oil stocks. this is aninvestment analyst’s job, not an economist’s.
i agree you’ll do just fine following your intuition.
Apparently, this Nadeau neglected to mention his divinely-inspired omniscience.
Scientific American has slid quite a way, it would seem. Anybody remember if they said anything about the Scholes-Black (or versa-vicey) stuff “back in the day” (before the LTCM collapse)?
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