Ecological economists and Keynesians in comparison: Robert Skidelsky and Joan Martinez-Alier
Same questions, different answers. A double-side interview to find a way out of the crisis
[11 Aprile 2014]
Keynesian economists like Krugman and Summers see this economic crisis could be a secular stagnation. Ecological economists like Daly, instead, believe that also a keynesian stimulus to aggregate demand could be turned into fuel for an anti-economic growth. What is your opinion on these issues?
Robert Skidelsky: «Secular stagnation would arise from a permanent collapse in the marginal efficiency -rate of return -to capital. Earlier stagnationists like Alvin Hansen thought that this was a consequence of growing abundance of capital goods. Today one would need to argue the secular stagnation theory more in terms of underconsumption resulting from growing inequality of wealth and income. A short-run Keynesian stimulus to aggregate demand could become an anti-economic growth policy depending on what was being stimulated. Economic growth depends on growth in productivity. One could imagine a full employment economy, with less work, and with zero or near zero productivity growth. This might be described as a satiation equilibrium».
Joan Martinez-Alier: I agree with Herman Daly, also with Tim Jackson, with Peter Victor who have developed an “ecological macroeconomics without growth” for rich countries. The trouble with Keynesianism is that it started in the 1930 as a doctrine, or better a theory of how to get out of the economic crisis, NOT by decreasing wages because this was seld-defeating, but by increasing Public Investment even if financed by Public Debt (“deficit spending”). This made sense. The trouble is that Keynesianism became a doctrine of long term economic growth with the Harrod-Domar models of the 1950s, 1960s. A metaphysical doctrine of economic growth forever, with no attention paid to scarcity of physical resources, to pollution. A remarkable Keynesian like Robert Skidelsky recently published an article saying that the State should spend more, make investments (so far so good, I agree), and he added to my dismay that shale gas fracking was a best opportunity for investment. Little concern for the environment and about climate change. This is very different from Daly’s, Jackson’s, Victor’s ecological macroeconomic without growth. We can have “prosperity without growth” in the rich countries, even with some degrowth, as we shall discuss in Leipzig in September 2014.
As demonstrated by the outcome of the Cop19 in Warsaw, political leaders fail to find a satisfactory international agreement to combat climate change and to the protection of natural resources. You believe that cap-auction-trade systems for basic resources are practicable hypothesis?
RS: «Why not?»
JMA: «I believe in resource caps, but not in the auctions. Look to fisheries, the auctions are a means of dispossession of poor fishermen. But I believe in caps, for instance “leave the oil in the soil” in places like the Yasuni in Ecuador, the Niger Delta in Nigeria, against climate change and to save the local environment and for human rights. Also in Goa and other states in India, extraction caps on iron ore extraction. Good idea. I also believe in zoning regarding land use, green belts for instance. But I do not believe in “habitat trading”».