Ends and Means: A Practical Dualism

Herman Daly and Joshua Farley: Ecological Economics 2nd edition: Chapter 3: Ends, Means and Policy Ends and Means: A Practical Dualism "Ecological economics has at least as much in common with standard economics as it has differences. One such important common feature is the basic definition of economics as the study of the allocation of scarce means among competing ends (though we will explain in later chapters why focusing on scarce resources is necessary but not sufficient). There are disagreements about what is scarce and what is not, what are appropriate mechanisms for allocating different resources (means) and how we rank competing ends in order of importance – but there is no dispute that using means efficiently in the service of ends is the subject matter of economics. Using means in the service of ends implies policy. Alternatively, policy implies knowledge of ends and means. Economics, especially ecological economics, is inescapably about policy, although the rarefied levels of abstraction sometimes reached by economists may lead us to think otherwise. Economic anthropologist Karl Polanyi states “The substantive meaning of economics derives from man’s dependence for his living upon nature and his fellows. It refers to the interchange with his natural and social environment, in so far as this results in supplying him with the means of material want satisfaction.” If economics is the study of the allocation of scarce means in the service of competing ends, we have to think rather deeply about the nature of ends and means. Also, policy presupposes knowledge of two kinds: of possibility and purpose and of means and ends. Possibility reflects how the world works. In addition to keeping us from wasting time and money on impossibilities, this kind of knowledge gives us information about trade-offs between real alternatives. Purpose reflects desirability, our ranking of ends, our criteria for distinguishing better from worse states of the world. It does not help much to know how the world works if we cannot distinguish better from worse states of the world. Nor is it useful to pursue a better state of the world that happens to be impossible. Without both kinds of knowledge, policy discussion is meaningless.(1) To relate this to economic policy, we need to consider two questions. First, in the realm of possibility, the question is: what are the means at our disposal? Of what does our ultimate means consist? By “ultimate means” we mean a common denominator of possibility or usefulness that we can only use up and not produce, for which we are totally dependent on the natural environment. Second, what ultimately is the end or highest purpose in whose service we should employ these means? These are very large questions, and we can not answer them completely, especially the latter. But it is essential to raise the questions. There are some things, however, that we say by way of partial answers, and it is important to say them. Means ‘Ultimate means’, the common denominator of all usefulness, consist of low-entropy matter-energy.(2) Low-entropy matter-energy is the physical coordinate of usefulness, the basic necessity that humans must use up but cannot create, and for which the human economy is totally dependent on nature to supply. Entropy is the qualitative physical difference that distinguishes useful resources from an equal quantity of useless waste. We do not use up matter and energy per se, (First Law of Thermodynamics), but we do irrevocably use up the quality of usefulness as we transform matter and energy to achieve our purposes (Second Law of Thermodynamics). The capacity for entropic transformations of matter-energy to be useful is therefore reduced both by the emptying of finite sources and by the filling up of finite sinks. If there were no entropic gradient between source and sink, the environment would be incapable of serving our purposes or even sustaining our lives. Technical knowledge helps us to use low entropy more efficiently; it does not enable us to eliminate or reverse the direction of the metabolic flow. Matter can of course be recycled from sink back to source by using more energy (and more material implements) to carry out the recycling. Energy can be recycled only by expending more energy to carry out the recycling than the amount recycled, so it is never economic to recycle energy – regardless of price. Recycling also requires material implements for collection, concentration and transportation. The machines used to collect, concentrate and transport will themselves wear out through a process of entropic dissipation, the gradual erosion and dispersion of their material components into the environment in a one-way flow of low-entropy usefulness to high-entropy waste. Any recycling process must be efficient enough to replace the material lost to this process. Nature’s biogeochemical cycles powered by the sun can recycle matter to a high degree – some think 100%. But this only underlines our dependence on nature’s services, since in the human economy we have no source equivalent to the sun, and our finite sinks fill up because we are incapable of anything near 100% recycling. Information: The Ultimate Resource? There is a strong tendency to deny our dependence on nature to achieve our purposes. Among the more explicit denials is that from George Gilder: (4) “Gone is the view of a thermodynamic world economy, dominated by “ natural resources” being turned to entropy and waste by human extraction and use. … The key fact of knowledge is that it is anti-entropic: it accumulates and compounds as it is used. … conquering the microcosm, the mind transcends every entropic trap and overthrows matter itself.” According to The Economist, George Gilder is “America’s foremost technology prophet” who’s recommendation can cause the share price of a company to increase by 50 percent the next day(5). If Gilder is really that influential, it simply proves that stock prices are often based on erroneous information and irrational expectations. To cast further doubt on Gilder’s ‘Gnostic’ prophecy, one need only recall the aphorisms of Nobel chemist Frederick Soddy, “No phosphorus, no thought,”(7) and of Loren Eisley, “the human mind .. burns by the power of a leaf.” As Kenneth Boulding – one of the pioneers of ecological economics – pointed out, knowledge has to be imprinted on physical structures in the form of improbable arrangements of matter before it is effective in the economy. And low entropy is the quality of matter-energy that increases its capacity to receive and retain the improbable imprint of human knowledge. For example, to receive the imprint, a typical computer microelectronics plant producing 5000 wafers per day generates some 5 million liters of organic and aqueous solvent waste (i.e. high entropy) per year,(8) in addition to the raw materials and energy used. With regard to retaining the imprint, recent estimates suggest that the information economy in the U.S. consumes 13% of the electricity we use as a nation, and this level in increasing rapidly. (9) Furthermore, as important as knowledge is, it is misleading to say it grows by compounding accumulation. New dollars from compound interest paid into a bank account are not offset by any decline in old dollars, that is, the principal. Yet new knowledge often renders old knowledge obsolete, as we saw in our discussion of scientific revolutions and paradigm shifts. Do the scientific theories phlogiston(10) and the ether (11) still count as knowledge? And when knowledge becomes obsolete, the artifacts that embody that knowledge become obsolete as well. Again, the IT economy is the best example. According to the US EPA, Americans purchased some 65 million computers and monitors loaded with toxic materials in 2007 and stored or disposed of 72 million. This is just part of the 1322 tons of toxin-laden computer products that reached the end of life that year.(12) For every three computers that enter the market, two become obsolete. The corollary of Moore’s law – that computer speed will double every 18 months while prices fall – is that brand-new IT devices are never far from becoming electronic waste. This is hardly anti-entropic. Physicists will not be surprised, because they have never found anything that is anti-entropic. As E. J. Mishan noted, technological knowledge often unrolls the carpet on increased choices before us by the foot while simultaneously rolling it up behind us by the yard(13). Yes, knowledge develops and improves, but it does not grow exponentially like money compounding in the bank. Furthermore, new knowledge need not always reveal new possibilities of growth; it can also bring serious harm and reveal new limitations. The new knowledge of the fire-resisting properties of asbestos increased its usefulness; subsequent knowledge of of its carcinogenic properties reduced its usefulness. New knowledge can cut both ways. Finally, and most obviously, knowledge has to be actively learned and taught every generation – it cannot be passively bequeathed like an accumulating stock portfolio. When society invests little in the transfer of knowledge to the next generation, some of it is lost, and its distribution often becomes more concentrated, contributing to the growing inequality in the distribution of income, as well as to the general dumbing-down of the future. Waste as a Resource? The common view among economists and many others is that waste is just a resource we have not yet learned to use, that nature supplies only the indestructable building blocks of elemental atoms, and that all the rest either is or can be done by humans. What counts to economists is value added by human labor and capital – that to which value is is added is thought to be totally passive stuff, not even worthy of the name natural resources, as evidenced by Gilder’s putting the term in quotation marks. Natural processes, in this view, do not add value to the elemental building blocks – and even if they did, man-made capital is thought to substitute for such natural resources. The brute fact remain, however, that we can only get so much energy from a lump of coal, we cannot burn the same lump twice, and the resulting ashes and heat scattered into nature’s sinks really are polluting wastes and not just matter-energy of equally-useful potential, if only we knew how to use it. Eroded topsoil washed to the sea and chlorofluorocarbons in the ozone layer are also polluting wastes on a human timescale, not just “resources out of place.” No one denies the enormous importance of knowledge.(14) But this denigration of the importance of the physical world, and exclusive emphasis on knowledge as our ultimate resource, seems to be a modern version of Gnosticism. It appears to be religiously motivated by a denial of our creaturehood as part of the material world, by the belief that we have, or soon will have, transcended the world of material creation and entered an unlimited realm of esoteric knowledge, albeit technical now instead of spiritual. Thus, even in the discussion of means we are pushed out of the purely biophysical realm to consider alternative religious philosophies, including most prominently the revival of the ancient Christian heresy of Gnosticism. Ends: We argued earlier that there is such a thing as ultimate means and that it is low-entropy matter-energy. Is there such a thing as an ‘ultimate end’, and if so, what is it? Following Aristotle, we think there are good reasons to believe that there must be an ultimate end, but it is far more difficult to say just what it is. In fact we will argue that, while we must be very dogmatic about the existence of the ultimate end, we must be very humble and tolerant about our hazy and differing perceptions of what it looks like. In an age of pluralism, the first objection to the idea of ultimate end is that it is singular. Do we not have many ultimate ends? Clearly we have many ends, but just as clearly they conflict and we must choose between them. We rank ends. We prioritize. In setting priorities, in ranking things, something – only one thing – has to go in first place. That is our practical approximation to the ultimate end. What goes in second place is determined by how close it came to the first place, and so on. Ethics is the problem of ranking plural ends or values. The ranking criterion, the holder of first place, is the ultimate end (or its operational approximation), which grounds our understanding of objective value - better or worse as real states of the world, not just subjective opinions. We do not claim that the ethical ranking of plural ends is necessarily done abstractly, a priori. Often the struggle with concrete problems and policy dilemmas forces decisions, and the discipline of the concrete decision helps us implicitly rank ends whose ordering would have been too obscure in the abstract. Sometimes we have regrets and discover that our ranking was not in accordance with a subsequently improved understanding of the ultimate end. Like scientific theories, desirable ends should also be subject to empirical testing and falsification. Neoclassical economists reduce value to the level of individual tastes or preferences, about which it is senseless to argue. But this apparent tolerance has some nasty conseque3nces. Our point is that we must have a dogmatic belief in objective value, and objective hierarchy of ends ordered with reference to some concept of the ultimate end,however dimly we may perceive the latter. This sounds rather absolutist and intolerant in modern devotees of pluralism, but a little reflection will show that it is the very basis of for tolerance. If A and B disagree regarding the hierarchy of values, and they believe that objective value does not exist, then there is nothing for either of them to appeal to in an effort to persuade the other. It is simply A’s subjective values versus B’s. B can vigorously assert her preferences and try to intimidate A into going along, but A will soon get wise to that. They are left to resort to physical combat or deception or manipulation, with no possibility of truly reasoning together in search of a clearer shared vision of objective value, because, by assumption, the latter does not exist. Each knows his own subjective preferences better than the other, so no “values clarification” is needed. If the source of value is in one’s own subjective preferences, then one does not really care about the other’s preferences, except as they may serve as a means to satisfying one’s own. Any talk of tolerance becomes a sham, a mere strategy of manipulation, with no real openness to persuasion.(15) Of course, we must also be wary of dogmatic belief in a too explicitly defined ultimate end, such as those offered by many fundamentalist religions. (16) In this case, again, there is no possibility of truly reasoning together to clarify a shared perception, because any questioning of revealed truth is heresy.” ISBN: 978-1-59726-681-9 2011