Chapter 3: The Relationship between the Environment and the Economy
3.5. Dialectic between Environment and Economy
Traditional environmental and economic theory has been based on the "compatibility of the environment and the economy" as a perspective when attempting to resolve the conflicting and contradictory relationship between the environment and the economy. This is a simple and safe motto that has been widely used, but it is in fact an empty theory.
The reason why it is an empty theory is that modern economic activities since the Industrial Revolution, which work on the natural environment and are promoted even if they sometimes destroy it, have to stand in constant conflict and tension with the natural environment.
In the framework of classical economics, the environment is regarded as an external condition of the economy, and environmental destruction is regarded as an external diseconomical event. Then, policy technologies such as emissions trading and environmental taxes (carbon tax) are used to internalize the external diseconomies and alleviate the conflict between the economy and the environment.
Compared to the supremacy of economic theory, which underestimates external diseconomies and seeks to protect the superiority of economic activities, this direction is a conscientious attempt to dialectically sublate the economic-environmental antagonism. However, it is impossible to completely internalize the external condition of the environment, which is governed by natural laws, into an economy, and it must always remain an incomplete internalization, which is only partial as a dialectic.
Let us change the premise of separating the economy and the environment into an internal/external relationship and assume that human economic activity is just one of the activities carried out within the great condition of the environment. However, this assumption does not automatically eliminate the antagonistic relationship between the environment and the economy.
Economic activities motivated by human desires can easily go out beyond the environmental conditions. The destruction of the environment since the Industrial Revolution may be interpreted as such a "phenomenon of environmental externalization of the economy. To overcome such a situation, it is necessary to keep the economy inside the environment.
In this respect, economic activity before the industrial revolution was inefficient and undeveloped, relying on human power, and as a result economic activity was inevitably limited to environmental conditions. However, since the Industrial Revolution, the economy has surpassed the environment due to the rapid increase in productivity thanks to the expansionary technological development.
If it is neither possible nor appropriate to reverse the externalization of the economy to the pre-industrial stage of development, the only way to solve this problem is to introduce an environmentally planned economy. An environmentally planned economy, especially an "ecologically sustainable planned economy," is a technique for keeping economic activities within environmental standards, both quantitatively and qualitatively.
The environment and the economy are in a perfect dialectical relationship, and economic planning guided by rigorous environmental criteria is the guarantee of that perfection. Conversely, through economic planning, the opposition between the environment and the economy is completely sublated and resolved.
๐The papers published on this blog are meant to expand upon my On Communism.
