Abstract
In order to explain the nature of Bromley’s ecological economics, I have to translate some of the concepts he uses into my terminology. In section 1, I will show that Bromley admits the non-neutrality of ecological economics, though he tries to justify this non-neutrality by defending that the values constituting his normative perspective result from empirical observations. In section 2, I will deal with Bromley’s argument that economic science should be objective. His (residual) logical positivist idea that objectivity implies neutrality causes Bromley, however, to wrestle with its meaning. In section 3, I will deal with Bromley’s objections to conventional economists’ inclination to prescribe the political motive for institutional change. Though I fully agree that it is not the economist’s task to prescribe political motives, I deem his endeavour to describe political motives scientifically redundant. In section 4, I will comment on Bromley’s stress that science should explain rather than predict. I will argue that Bromley’s keeping on to the (political) means/ends dichotomy brings him on the slippery slope of recommending institutional changes, i.e. of predicting rather than explaining. In the final section 5, I will argue that, due to his concentration on property rights and property regimes, the insights Bromley’s approach offers us into the relationships between the institutional organisation of an economy and the content and distribution of private interests are restricted. The nature of his ecological economics is, hence, partially impartial.
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Imagine that laborers, through threat of a crippling strike, were able to extract work concessions to maintain total daily pay at its current level, but to reduce the work day from 8 hours to 6 hours’ (Bromley 1989, 143).
Contrary to what the term “private economic efficiency” suggests, allocative efficiency regards the efficiency within the whole of an economy. The reason why allocative efficiency does not contradict private efficiency is that allocative efficiency derives from the combined (efficient) actions of (nominally) independent, i.e. private, producers and consumers. Under specific conditions, i.e. absence of market failures (and here the ambiguity of the term “allocative efficiency” pops up again), privately efficient - i.e. economising - behaviour is deemed to satisfy the aggregate of individual tastes and preferences in the best possible way. In other words, private economising efficiency is a necessary and sufficient condition for allocative efficiency. Market prices are responsible for this harmonious connection between the private and the common. ‘[The] argument holds that in conditions of thoroughgoing competition among a number of buyers and sellers the social value of inputs and outputs is correctly reflected in their respective market prices’ (Bromley 1991, 174). Allocative efficiency thus is about the best attainable combination of “commodities”, i.e. of goods and services sold and bought on the markets that are institutionalised in a particular economy. Pareto-optimality is the criterion for allocative efficiency. The Pareto-principle states that a specific combination of goods and services is Pareto-optimal if no other combination exists that satisfies one economic decision unit’s preferences better without satisfying the other economic decision units’ preferences worse.
For instance in the following passage (Bromley 1989, 146). After distinguishing between four kinds of institutional transactions, Bromley writcs: ‘These institutional transactions will arise as autonomous responses to new economic conditions and opportunities, or they will arise because of an absence of autonomous change and so they will be imposed from without’. My argument is that a consequent use of the concepts, introduced by Bromley, would denote transactions resulting from ‘autonomous responses to new economic conditions [as, for instance, changing preferences concerning mine safety; MD] and opportunities’ as commodity transactions, not as institutional transactions.
In his reaction to my analysis of his writings, Bromley argues that the social welfare function and the social utility function are merely economistic metaphors for thinking about whose interests count in a policy, and what goods and services enter into calculation of well being. It is, he writes, an economic way of thinking, but it is not meant to impose economistic criteria.
In one passage, where he speaks of ‘multiple ways of knowing’ and of truth as ‘both relative and elusive’, Bromley seems to recognise this (Bromley 1993a, 838).
Bromley’s quotation of Harberger precisely is an illustration of the latter’s endeavour to keep the consensus within a community of economists intact. ‘About this time, Arnold Harberger, in a self-admitted tract, felt compelled to reassure the timid, and to bolster the irresolute. Fearing that there was potentially corrosive diffidence among applied economists, Harberger offered the “Three Basis postulates for Applied Welfare Economics” […]. There he noted, with some apparent concern, “In an era when literally thousands of studies involving cost-benefit analysis or other types of applied welfare economics are underway at any given moment, the need for an accepted set of professional standards for this type of study should be obvious. […]”‘ (Bromley 1991, 214 ).
I cannot hold back the following amusing quotation (which at the same time confirms my statement): ‘[…] when the neo-classicist starts pontificating on proper social policy motivated on Pareto-efficiency grounds I understand that to be related to the drunk searching for his misplaced car keys under the street light, not because he dropped them there, but because that happens to be the place where there is enough light to see’ (Bromley 1985, 782).
Just as […] institutional arrangements will determine the nature and scope of commodity transactions, the economic conditions at any moment will be important in determining the institutional transactions that will occur, and hence the institutional arrangements that will emerge (Bromley 1989, 110).
Though the following quotation makes me hesitate whether my interpretation conforms to Bromley’s: ‘The next step will be to develop general equilibrium models that allow us to explain and assess institutional change such that the circularity of “efficiency” is avoided’ (Bromley 1997, 54).
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© 2001 Springer Science+Business Media Dordrecht
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Deblonde, M. (2001). The Nature of Bromley’s Economics. In: Economics as a Political Muse. The International Library of Environmental, Agricultural and Food Ethics, vol 2. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-9767-8_8
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