You Can't Eat GNP: Economics as if Ecology Mattered

Reviewed by Richard Walthers

The most recent thinking on the evolution of homo sapiens is that we shared the planet with as many as 15 to 20 other hominid species for four million years. This is in contrast to the single line evolution theory that was gospel. Until recently, scientists had believed that there wasn’t enough ecological space on earth for more than one culture-bearing species, so they postulated that the species could only have come down through one line. While the evolutionary pathway portion of the theory has been proven wrong, the space aspect of the theory still appears to be quite valid.

Concerning the well-being of ecological space, the essential thought of Eric A. Davidson’s recent book, You Can’t Eat GNP: Economics as if Ecology Mattered, is just that—we can’t eat GNP. Davidson is a senior scientist at the Woods Hole Research Center and the value of his recent book lies in his explanation of economics, cost benefit analysis and discounting, and how these tools don’t work well when evaluating natural resources. This book covers some well-cultivated ground, but it serves as a good primer for the topic because it is written in an accessible, concise style. Its short length, 216 pages, makes it the perfect companion for your next business flight.

If we understand that all our wealth ultimately emanates from the natural world—the soil, the air, the water, the forest and the oceans, then it becomes apparent that our current system of economics is not serving the environment very well. Davidson tells the story of one economist who "argued that we need not worry much about the effects of global warming on the economy, because the only sector of the economy that he considered strongly influenced by the climate is agriculture, which contributes only three percent of the United States’ GNP. This view of how the world works seems to suggest that if the crops fail, the people could eat the 97 percent of the GNP that remains."

It seems that a change is slowly occurring in the discussion of the environment, and I’m glad to see scientists like Davidson entering the arena. He states that the problem with moral arguments is that you either accept them or reject them. Although it is apparent that he has bought in to the concept of saving the environment as a moral argument, the author also proposes that we begin to make our decisions on rational criteria that are based on the true value of the environment. However, I wish he would have gone one step further and talked about the need for and application of measurement techniques for the entire ecological debate.

The need persists for the formulation of metrics, a set of standard measurements that are understood by everyone so that the natural world comes to be properly valued. We generally discount the future value of nature so that it is never worth more than at the present moment. Its future value isn’t worth as much to future generations as it is to us today. Davidson writes, "Our current system values the growth of gross national product over conservation of essential natural resources, and it falsely separate the economic system from the ecological system upon which our well-being depends."

When the author goes in search of sustainability he discusses the differences between the cowboy economy and the spaceship economy. The cowboy economy describes our country when there were very few people and a lot of open space. It did not matter how many resources were used or how much trash was created because the ecological space was much larger than the economic activities and it could absorb any localized detrimental effects. On the opposite end of the spectrum, the spaceship economy understands that economic activity has a critical impact on our natural limited biological life support system.

The issues of sustainability and equality have become inextricably linked. Architect William McDonough has often said that the issue of over-population will be resolved when women achieve true equality. I would take that thought one step further and say it will happen when all species are equally valued. Davidson offers eight suggestions, most of which depend upon government to institute, that would begin to address the sustainability issue.

We can no longer be cowboys and future population growth will dictate that we recycle everything and waste nothing. In fact, the author states, "If the increasingly difficult challenges of consuming nonsubstitutable resources, providing food and disposing of garbage for a rapidly expanding population leaves us and future generations with fewer options and more problems to resolve—then we already have too many people on the earth."

It is interesting that in the 25,000 years since we have emerged as the sole survivors of all the hominid species that once existed, we have always thought there were no limits on either our activities or on our numbers. Can the earth continue to support us? Now that there are six billion of us and resources are dwindling, Davidson’s book reminds us that we will have to redirect our economies to reflect the true basis of our prosperity. He is convinced we can continue our culture if we begin to make the necessary adjustments to the way we go about our business. The author even recommends that you lend this book to someone so that its ideas can go beyond preaching to the choir. So lend it to someone who usually does not read scientific, economic or environmental books.