Natural economy and other myths

OPPONENTS of market economies have written many elegies to the erosion by the greed of capitalism of nature's primeval beauty. Their laments are akin to the loss of the Old World that the landed gentry felt at the coming of commercial farming. None of that romanticism left a lasting impression, although it does find an audience in times of social stress.

Yet, painstaking scientific research confirms that environmentalists are right for the wrong reasons. Economic growth can be at the expense of natural beauty although the causation is not as simplistic as the condemnations of the environmentalists would suggest.

The pursuit of material wealth and environmental preservation are not goals as starkly opposed as made out by the environmentalists. Concern for the quality of the environment has grown with increasing affluence, although this is yet to be expressed in measurable prices which communicate the scarcity value of environmental wealth. While the market for intangibles such as sports, education and music has taken shape, the market for environment hasn't. Sports has taken advantage of its mass appeal to raise revenues. Education exchanges immortality in the form of chairs or memorials. But nature's heterogeneity has baffled the economist.

Natural wealth has some distinctive characteristics which do not conform to some of the accepted principles of economics. About the most important aspect is sutainability, implying discontinuous costs which can be inordinately high for environmental goods. R K Turner and D W Pearce argue that the outcomes of degradation are uncertain on account "of our ignorance of how complex ecosystems work....uncertainty dictates caution".

This is all the more necessary because "only natural capital has the attribute of irreversibility. Man-made capital can be increased or decreased at will." Some of the wealth of nature "serve life support functions...where there is no man-made substitute means possible major harm to mankind". Economists have an awkward job of accounting for "a moral imperative to care for the next generation, and this imperative is not readily interpreted in terms of utilitarian gains and losses".

Evidence on the conflict between sustaibility and economic growth cannot be wished away. Gordan Conway in his essay on sustainable agriculture illustrates this by insights from a valuable set of records of the manorial systems in England. The manorial system was long-lived and marked by a high degree of stability and equitability which was "obtained at the expense of productivity. Yields had not significantly increased since the Roman times and remained low for virtually all of the manorial period." The conflicts between sustainability and economic growth have been resolved in agriculture by home gardens which have "a notable characteristic of great diversity relative to their size".

In a case study of Zimbabwe, Ian Scoone illustrates the uncertainty inherent in gauging the carrying capacity of nature. Cattle raising is extremely productive in the region to an extent where there is an incentive to expand their numbers well beyond the carrying capacity of the agrosystem. Sharp fluctuations in rainfall levels aggravate the problem of pinning down the carrying capacity of the ecosystem. The communal system of Southern Africa encourages opportunistic behaviour among farmers who move cattle, in years of low rainfall, to the hills where fodder is more plentiful. Grazing in the hills depletes the reserves, leading to catastrophic droughts. It would seem that property rights will correct the imbalance caused by the communal systems.

The dilemma of economic growth and ecological carrying capacity is acute in island economies. Stephen M J Bass reviews the experience of islands where forests are "absolutely critical for life support systems, especially for local water supplies, subsistence wood supplies and soil stabilization". However, islands perforce specialise in single crops, which erodes their ecological stability. In recent years, island economies have turned to tourism for more benign systems of development. However, this does not necessarily have the desired effects. For example, in the Eastern Caribbean, "most of the economic resources (particularly for tourism) and the strategic resources (infrastructure such as sports, airports, roads, housing and services) are coastal. They are highly vulnerable to rising sea levels and storm surges."

Just like economists looked at technology as a black box, they are equally prone to look at the environment as a green box. They are disinclined to look at the complexities of biodiversity, interdependence of species and regional variations in interactions between human beings and their habitat.

Kishore Jethanandani is a freelance writer