Georgescu-Roegen and ecological economics

Clément Levallois writes in Can de-growth be considered a policy option? A historical note on Nicholas Georgescu-Roegen and the Club of Rome, published in Ecological Economics by:

If [according to Georgescu-Roegen] the economic process is an entropic one, economic growth should be curbed or even reversed, in order to stop the "waste" of energy in "non-necessary" uses, so as to preserve it for the sake of future generations.

This conclusion raises at least two questions, to which Georgescu-Roegen provided answers which many found unconvincing. What is the rate of this entropic decay? And if we accept that it is necessary to economize on natural resources, to which level of economic activity should we be ready to scale down our current societies? The answer to the first question is unknowable, since the non-mechanical character of entropy makes an "entropymeter" inconceivable. This implies that it is impossible to predict whether it is our current generation or generations in the distant future who will be confronted with the direst consequences of the exhaustion of natural resources.

To the second question, Georgescu-Roegen provided a logical answer: "… not only growth, but also a zero-growth state, nay, even a declining state which does not converge toward annihilation, cannot exist forever in a finite environment." [Energy and economic myths, Southern Economic Journal 41 (3) (1975), pp. 347–381]

I am unconvinced by Georgescu-Roegen assumptions but he looks more coherent than the ecological economists and their followers who believe that a sustainable, as well as equitable and happy, future is possible.

When costs are good and benefits don't matter: science projects and government stimulus

An editorial in Nature says that "critics of US President Barack Obama have delighted in picking out projects funded by last year's $787-billion economic-stimulus package that they believe are examples of waste."

Yet the science projects, at least, have survived peer review, which tends to be a far more sceptical and rigorous vetting process than anything McCain and Coburn [apparently two such critics of Obama] are likely to provide.

However, the editorial does not provide the slightest clue that such projects are cost-effective. In fact, the editorialist seems completely unconcerned about costs. I thought this was bad enough, but then I read the following comment to the editorial:

I was myself awarded a research grant funded by the stimulus and administered through the NIH. The grant award allowed me to create 3.5 full-time research jobs and has to date resulted in the spending of nearly $100,000 US on equipment and consumable reagents. [...] I did not apply for the grant for the purpose of stimulating the economy, but the grant award both created immediate new staff jobs and resulted quickly in money being spent, and those were certainly the legislative intention of the stimulus.

From that perspective, it actually doesn't matter what science I was doing.

Brian Lazzaro
Associate Professor, Cornell University

Lazzaro, like many US politicians and voters, actually thinks that costs are good in and by themselves - although probably only as long as they are paid by taxpayers. I doubt he applies the same philosophy at home.