Abstract
This chapter describes a simple scenario model consisting of a material exchange between an economy and nature. A concept of natural capacity and an index of economic sustainability are introduced. The index measures the probability of the model economy avoiding collapse within a certain period, such as 200 years. This probability is inversely related to the capacity of nature to support the economy, i.e., natural capacity. Through adjusting the ways in which the economy responds to changes in natural capacity, the scenarios explore the conditions under which collapse occurs or long-term stability is attained. From this analysis, a concept of material discipline emerges.
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Notes
- 1.
Georgescu-Roegen (1971, p. 254).
- 2.
Georgescu-Roegen (1971, pp. 228 et seq.).
- 3.
Georgescu-Roegen (1971, p. 232).
- 4.
Meadows et al. (1972, Figure 26, pp. 110–111).
- 5.
- 6.
Hayes (2012, p. 190).
- 7.
Meadows et al. (1972, p. 132). Emphasis mine.
- 8.
See, for example, Galtung (1973).
- 9.
- 10.
- 11.
Victor (2008, ch. 10).
- 12.
Victor (2008, ch. 11).
- 13.
Odum (1971, Figure 10.1, p. 275).
- 14.
Odum (1994, chs. 23–26). Chapter 23 in particular is a brilliant summary of economics 101, incorporating flows of money into the energy circuit language to describe production, consumption, supply, demand, price, elasticity, the marginal effect, and growth.
- 15.
In their textbook, Microeconomics in Context, Goodwin et al. (2009) include natural capital among their classification of types of capital (pp. 138–140), something that earlier economics textbooks did not consistently do.
- 16.
Despite recognizing the concept of natural capital, Goodwin et al. then proceed to conflate ‘capital’ with ‘capacity’: “Natural capital may … be used as a depository for the waste products from the production process” (p. 166). This statement would be true only if the relation between deposits and withdrawals on the natural bank account were one-to-one, like a regular bank account. A moment’s reflection will confirm this is not so.
- 17.
A Massachusetts Institute of Technology study in 1970 defined a similar term, ‘ecological demand’, which is “a summation of all man’s demand on the environment, such as the extraction of resources and the return of wastes” (cited in Goldsmith et al. 1972, pp. 4–5). The definition conflates the natural ‘environment’ with the ecosphere, that is, all ecosystems on Earth. It is important to clarify that the natural environment comprises both ecological and physical, or non-ecological, components: the geosphere, hydrosphere and atmosphere. All of these together constitute natural capacity.
- 18.
As an aside, Odum (1994) proposed that the physical relations between natural system processes and economic activity can be formulated in terms of the physics of electrical circuitry. Natural capacity thus is analogous to electrical capacitance, and resource-loading by the economy is analogous to electrical resistance. Odum’s energy circuit language for describing and modeling ecological and other systems is derived from the concepts and symbology of electrical engineering. It turns out that the concepts of electrical current, capacitance, storage, potential, resistance and gating apply quite well to the description and modeling of ecological systems and to complex systems in general.
- 19.
United Nations (2013).
- 20.
See, for example, World Wildlife Fund (2016, pp. 74–83).
- 21.
In the canonical logistic growth model, population growth is exponential up to a value of K/2, where K is the carrying capacity. In this model, K/2 is 3 billion.
- 22.
- 23.
King, A. et al. in Meadows et al. (1972, p. 191).
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Murison Smith, F. (2019). Simple Physical Model of Nature and Economy. In: Economics of a Crowded Planet. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-31798-0_3
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