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Rethinking Economic Growth Theory From a Biophysical Perspective

Part of the book series: SpringerBriefs in Energy ((ENERGYANALYS))

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Abstract

The purpose of this book is to begin thinking about what a biophysical growth theory might look like. All theories must start by excluding from their scope the complexities of the real world that are deemed irrelevant. The most appropriate starting point for a biophysical growth theory is to investigate the validity of the assumptions made by neoclassical growth theory (the dominant approach at the present time). This chapter outlines the basic tenets of neoclassical growth theory as well as the four implicit neoclassical assumptions that are tested throughout the book. A variety of critiques of neoclassical growth theory are reviewed, followed by a discussion of the unorthodox empirical methodology that is adopted (which involves abandoning the use of real GDP for measuring economic scale). This book uses energy flow as a measure of biophysical scale. While this methodology requires a leap of faith on the part of the reader trained in conventional economics, the need for a new approach to growth theory is so great that this paradigm shift can be justified.

All theory depends on assumptions which are not quite true. That is what makes it theory.

– Robert Solow (1956, p. 65)

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Notes

  1. 1.

    Interestingly, Solow was referring to assumptions made by the Harrod–Domar model (not his own assumptions). In the same paragraph, he continues: “When the results of a theory seem to flow specifically from a special crucial assumption, then if the assumption is dubious, the results are suspect” (1956, p. 65). While his aim is the Harrod–Domar assumption of fixed factor proportions, one can also argue (as I do in this book) that the results of the Solow–Swan model are also dependent on “dubious” assumptions.

  2. 2.

    This functional form owes its name to the work of Cobb and Douglas (1928), but the original use of the equation dates back to the work of Wicksell (1911)[1901].

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  1. Faculty of Environmental Studies, York University, Toronto, Ontario, Canada

    Blair Fix

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  1. Blair Fix
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Fix, B. (2015). Introduction. In: Rethinking Economic Growth Theory From a Biophysical Perspective. SpringerBriefs in Energy(). Springer, Cham. https://doi.org/10.1007/978-3-319-12826-9_1

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  • DOI: https://doi.org/10.1007/978-3-319-12826-9_1

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