baltakatei

The rebound effect of this paradox can be mitigated only by adding other factors to the uptake of the more efficient method, such as requirements for reinvestment, taxes, and regulations. So they say in economics texts.

The paradox is visible in the history of technological improvements of all kinds. Better car miles per gallon, more miles driven. Faster computer times, more time spent on computers. And so on ad infinitum. At this point it is naïve to expect that technological improvements alone will slow the impacts of growth and reduce the burden on the biosphere. And yet many still exhibit this naiveté.

Associated with this lacuna in current thought, perhaps a generalization of its particular focus, is the assumption that efficiency is always good. Of course efficiency as a measure has been constructed to describe outcomes considered in advance to be good, so it’s almost a tautology, but the two can still be destranded, as they are not quite the same. Examination of the historical record, and simple exercises in reductio ad absurdum like Jonathan Swift’s “A Modest Proposal”, should make it obvious that efficiency can become a bad thing for humans. Jevons Paradox applies here too, but economics has normally not been flexible enough to take on this obvious truth, and it is very common to see writing in economics refer to efficiency as good by definition, and inefficient as simply a synonym for bad or poorly done. But the evidence shows that there is good efficiency and bad efficiency, good inefficiency and bad inefficiency. Examples of all four can easily be provided, though here we leave this as an exercise for the reader, with just these sample pointers to stimulate reflection: preventative health care saves enormous amounts in medical costs later, and is a good efficiency. Eating your extra children (this is Swift’s character’s “modest proposal”) would be a bad efficiency. Any harm to people for profit is likewise bad, no matter how efficient. Using an over-sized vehicle to get from point A to point B is a bad inefficiency, and there are many more like it; but oxbows in a river, defining a large flood plain, is a good inefficiency. On and on it goes like this; all four categories need further consideration if the analysis of the larger situation is to be helpful.

The orienting principle that could guide all such thinking is often left out, but surely it should be included and made explicit: we should be doing everything needed to avoid a mass extinction event. This suggests a general operating principle similar to the Leopoldian land ethic, often summarized as “what’s good is what’s good for the land.”[cmt 2] In our current situation, the phrase can be usefully reworded as “what’s good is what’s good for the biosphere.” In light of that principle, many efficiencies are quickly seen to be profoundly destructive, and many inefficiencies can now be understood as unintentionally salvational. Robustness and resilience are in general inefficient; but they are robust, they are resilient. And we need that by design.

The whole field and discipline of economics, by which we plan and justify what we do as a society, is simply riddled with absences, contradictions, logical flaws, and most important of all, false axioms and false goals. We must fix that if we can. It would require going deep and restructuring that entire field of thought. If economics is a method for optimizing various objective functions subject to constraints, then the focus of change would need to look again at those “objective functions”. Not profit, but biosphere health, should be the function solved for; and this would change many things. It means moving the inquiry from economics to political economy, but that would be the necessary step to get the economics right. Why do we do things? What do we want? What would be fair? How can we best arrange our lives together on this planet?

Our current economics has not yet answered any of these questions. But why should it? Do you ask your calculator what to do with your life? No. You have to figure that out for yourself.