Virtually all large-scale damage to the global environment is
caused by economic activities, and the vast majority of economic
planners in both business and government coordinate these
activities on the basis of guidelines and prescriptions from
neoclassical economic theory. In this hard-hitting book, Robert
Nadeau demonstrates that the claim that neoclassical economics is a
science comparable to the physical sciences is totally bogus and
that our failure to recognize and deal with this fact constitutes
the greatest single barrier to the timely resolution of the crisis
in the global environment.
Neoclassical economic theory is premised on the belief that the
"invisible hand" -- Adam Smith's metaphor for forces associated
with the operation of the "natural laws of economics" -- regulates
the workings of market economies. Nadeau reveals that Smith's
understanding of these laws was predicated on assumptions from
eighteenth-century metaphysics and that the creators of
neoclassical economics incorporated this view of the "lawful"
mechanisms of free-market systems into a mathematical formalism
borrowed wholesale from mid-nineteenth-century physics. The
strategy used by these economists, all of whom had been trained as
engineers, was as simple as it was absurd -- they substituted
economic variables for the physical variables in the equations of
this physics. Strangely enough, this claim was widely accepted and
the fact that neoclassical economics originated in a bastardization
of mid-nineteenth-century physics was soon forgotten.
Nadeau makes a convincing case that the myth that neoclassical
economic theory is a science has blinded us to the fact that there
is absolutely no basis in this theory for accounting for the
environmental impacts of economic activities or for positing viable
economic solutions to environmental problems. The unfortunate
result is that the manner in which we are now coordinating global
economic activities is a program for ecological disaster, and we
may soon arrive at the point where massive changes in the global
environment will threaten the lives of billions of people. To avoid
this prospect, Nadeau argues that we must develop and implement an
environmentally responsible economic theory and describes how this
can be accomplished.
Subjects: Economics, Business
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