The challenges of the bioeconomy

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By DANIEL ARRUDA COLONEL & JOSÉ MARIA ALVES DA SILVA*

From a biological point of view, “technological marvels” should be seen more as a threat than progress for humanity

With Aristotle, economics emerged as a branch of ethics: the ethics of relationships in activities that support material life (Aristotle, 2004). Therefore, in the Aristotelian conception, the link between ethics and sustainable development is inalienable, since the activities to sustain human material life are not neutral in relation to the natural environment. However, Aristotle did not have environmental issues as his objective.

He aimed to establish an ethics of justice, as clearly shown by his principle of fair trade, according to which the exchange of goods between two men must serve the purpose of improving the living conditions of both, and not constitute a means by which one could be benefited to the detriment of the other. Assimilated by Christian doctrine, the Aristotelian principle of fair exchange was incorporated into political economy for centuries, until, with the advent of the Enlightenment, economics began to be identified with the concepts of pleasure and self-interest, increasingly becoming what Aristotle himself had defined it as “unnatural chrematistics”, which can be observed in his text The politics (2004)

Concern for the environment is very recent in human history, becoming more widespread in the second half of the 1962th century. The studies by Carson (1971), Georgescu-Roegen (1983) and Schumacher (XNUMX) are seminal references on the topic of sustainable development. In the book Silent spring, Rachel Carson reports on the results of investigations into the effects of synthetic chemical agents on living organisms.

This work constituted a first major alert to the health dangers and environmental risks of pesticides. Proof of endocrine disorders caused by Dichloro-Diphenyl-Trichloroethane (DDT) and ecological damage led to a new political-governmental stance regarding the use of agrochemicals that culminated in the creation of the Environmental Protection Agency (EPA), by North American President John Kennedy.

E. F. Schumacher's work constituted one of the first challenges to the “myth of economic progress”, by drawing attention to the environmental impacts of great industrial powers, highly intensive in energy consumption and generating pollution. His most compelling message, supported by energy statistics, was simply that the North American lifestyle could not be taken as a global reference, as it could not be sustained for long.

This strongly argues against the neoclassical theory of economic growth, which predicted income convergence between countries. As Schumacher's work has made clear, the problem with this theory is that it simply disregards the constraints represented by stocks of non-renewable natural resources, such as coal, oil and water.

In this sense, the most general, or even holistic, treatment of the relationship between economic development, ethics and the environment was provided by the Romanian economist, based in the USA, Nichollas Georgescu-Roegen (1906-1994), in a series of fruitful and innovative. His work in this field constitutes a substantial critique of the mechanistic paradigm transplanted, by the founders of the neoclassical school, from Newtonian physics to Economics, in which the economic system is represented as if it were of the reproducible type, that is, capable of reproducing all the energy that consumes.

However, this only applies to labor and capital resources, which usually appear explicitly in the neoclassical production function. The product resulting from the application of these resources can be used to sustain them at a constant or increasing level, that is, to replenish the energy spent by workers in productive effort and to replenish the capital stock, on a constant scale (stationary reproduction) or increasing (enlarged playback). However, in this process, the collection of natural resources, such as land, water, forests and minerals, necessarily suffers entropic degradation. However, its usual omission from the production function argument seems to assume that while capital accumulates and the population grows, “everything else remains constant.”

This is why, as a kind of dissident from the mainstream neoclassical, from which he moved away in the 1960s, Georgescu-Roegen proposed for the economic system the analogy of entropic systems described by thermodynamic physics instead of the mechanistically inspired neoclassical model.[I]

Georgescu-Roegen's work is, in several aspects, innovative in relation to the neoclassical and Marxist schools, which, although diametrically opposed, have common aspects. Both emphasize the urban, capitalist and individualistic market system and, in principle, disregard the environmental impacts of urban-industrial expansion. The first because it is reductionist and abstract by nature, the second because, having as its main focus the history of class struggle theory, it is more concerned with the exploitation of man by man than with environmental degradation.[ii]

Georgescu-Roegen and E.F. Schumacher were among the first to realize that economic calculation is ethically mistaken when it reduces the different types of inputs of the production process to a sum of costs, without taking into account certain essential differences between the categories involved. According to Georgescu-Roegen, productive activity can be seen as a process that requires the presence of three different types of factors, designating them as “background”, “flow” and “stock”. Flow factors are the materials that enter the process and, transformed by the action of background factors, are incorporated into the product.

Among the background factors, a distinction must also be made between those that can be replaced, such as labor and capital, the first through the vegetative growth of the population, and the second through replacement investments, and those that necessarily present themselves in a finite quantity.” non-reproducible”, as is the case with land and stocks of fossil fuels and other mineral raw materials. However, in economic terms, no distinction is made between them – they all have a cost that is determined by their “market prices”.

Thus, non-renewable stock factors, such as mineral coal and oil, are treated, by the present generation, in the same way as other types, and their prices are determined by the respective 'production costs', on the one hand, and by demand. of the present generation, on the other. The energy needs of future generations are not taken into account.[iii] Thus, being determined only by the current forces of supply and demand, the price of these factors ends up being underestimated by this generation. In this case, from the point of view of a correct economic theory, the market fails to determine the price because it is unable to take scarcity into account, in its due dimension.[iv]

Others insights by Georgescu-Roegen were inspired by the observation of socioeconomic scenarios naturally based on cooperative and supportive behaviors, typical of certain local, agricultural-based, underdeveloped and overpopulated economies[v]. If one is to apply the technique of utility and production functions to these scenarios, one must be prepared to take into account at least two major differences in relation to the usual neoclassical treatment. The first factor to consider is that the well-being of a typical individual depends not only on his consumption possibilities, but also on the consumption possibilities of his community.

Formally, this can be represented by a utility function U = f(y,x), on what y represents the individual's own consumption capacity (i) to x represents the particular criteria by which he considers community well-being. Under the conditions f'(y) > 0 and f'(x) >0, this function implies that an individual's utility does not only depend on their own income, but also on the distribution of total income among the members of the community. This tends to be the case in small communities, in which each member knows the situation of the others and is aware of the interdependencies between them, in contrast to the utility function of the metropolitan man, for whom only the variable x is relevant, according to the neoclassical assumption.

On the other hand, in these scenarios, the criterion of maximizing profits also makes no sense, since, given the excess population in relation to other background factors, the objective of maximizing community income ends up overriding any individualistic objective of maximizing profit. .

Apparently, it was the consideration of the special economic characteristics of these scenarios that inspired Georgescu-Roegen to propose the analogy of thermodynamic physics as more suitable for economics than that of Galileo and Newton's mechanics. It is true that humanity as a whole is still far from facing the severe restrictions already observed in certain overpopulated local economies, to which the logical principles discussed above apply. But if it were properly considered that, as a result of the inevitable positive entropy of the economic process, it is to such a scenario that humanity will inexorably converge, this would be the most wise perspective.

There is no doubt that, in accordance with the Second Law of Thermodynamics, the economic activity of Homo sapiens contributed to increasing the positive entropy of the planet, which is why Georgescu-Roegen considered the Law of Entropy to be “the most economical in nature of all natural laws”. The ways of life resulting from “Fordist” industrialization constituted aggravating factors for this, not only because the “car is much more 'entropic' than the carriage”, and the “donkey is less 'entropic' than the motorcycle”, but also because the The mass production process spread the use of exosomatic organs, such as automobiles and motorcycles, consequently increasing the rate of conversion of non-renewable natural resources into non-recyclable waste.

The fascination provoked by “technological marvels”, made possible by the discovery of the laws of mechanics and electromagnetism, on the one hand, and the progressive loss of contact between man and “the wonders of nature”, as a result of urban-industrial expansion, on the other , contributed to the affirmation of the mechanistic model in economic theory and to a way of thinking that associates progress with economic growth, measured by the expansion of the Gross Domestic Product (GDP).

From a biological point of view, however, such change should be seen more as a threat than progress for humanity. This is another point raised by Georgescu-Roegen, which opens a new perspective for economic science, in which a “biological essence” of economic activity, in general, and technological development, in particular, is revealed. This is the reason why, from the 1970s onwards, this new perspective came to be known as bioeconomy.

Georgescu-Roegen borrowed from the biologist Alfred Lotka the terms “exosomatic”, to designate the artificial instruments and mechanisms that man invents, and “endosomatic”, to designate the natural physical organs of living beings. When a lion kills prey, it only has endosomal organs such as claws, jaw and teeth. Man, for the purpose of killing, usually uses weapons created by himself. Essentially, what distinguishes humans from other animal species is the fact that they are the only ones that use brain capacity to produce exosomatic organs. This is the fundamental reason why man has become the dominant species, among all other forms of life.

Exosomatic organs are not exclusive to humans. Some animal species also use them, such as birds that build nests and bees that build hives, for reasons similar to those of humans who build beds or houses; however, what distinguishes the human species is the ability to incessantly produce and invent exosomatic organs, not through genetic instinct, like birds and bees, but through the systematic use of reason. The human species, like all other living species, is subject to an endosomal evolutionary process, in accordance with Darwin's Law. The difference in relation to other species is that the human species also evolves through exosomatic means.

To the extent that it enhances human capabilities, the development of exosomatic organs, as a process of “making life easier”, whether through reduced effort or increased comfort and pleasure provided to man, establishes a vicious dependency in man. Another consequence of this is the inequality in the distribution of the benefits of this evolution between the class that plans, organizes, supervises and controls production, which Galbraith (1977) called technostructure, and the class “of those who simply participate in this production”.

In other words, to use Georgescu-Roegen's terms, the conflict between “those who govern” and “those who are governed”. The human species thus reveals another differentiating characteristic from other species, such as being biologically conditioned by biophysical processes and being socially shaped by institutional standards.

The problem with exosomatic dependence is that it puts humanity on a collision course with inevitable limits established by a finite endowment of natural resources. In this sense, as Galbraith had already demonstrated, it is through mechanisms that intensify this dependence that members of the technostructure reaffirm their governance power. This class thus represents the role of the villain in the environmental tragedy announced by Georgescu-Roegen.

*Daniel Arruda Colonel is a professor at the Department of Economics and International Relations at the Federal University of Santa Maria (UFSM).

*José Maria Alves da Silva He is a retired professor at the Federal University of Viçosa (UFV).

References


ARISTOTLE. Nicomachean ethics. São Paulo: Martin Claret, 2004. 

ARISTOTLE. Policy. São Paulo: Martin Claret, 2004. 

CARSON, R. Silent Spring. Madrid: Ed. Trotta S. A., 1962.

GALBRAITH, J. K. The new industrial state. São Paulo: Pioneira, 1977.

GEORGESCU-ROEGEN, N. The Entropy Law and the Economic Process. Cambridge, MA: Harvard University Press, 1971.

SCHUMACHER. E.F. The thing is to be small. São Paulo: Zahar, 1983.

Notes


[I] Before his “conversion”, Georgescu-Roegen was an exponent of theoretical research on mainstream neoclassical, having presented questions that inspired several of the main economic theorems later developed by other eminent neoclassicals such as Paul Samuelson.

[ii] In fact, Marx did not have time to witness the environmental implications of capitalist industrialization, which in his time was certainly a much less visible problem than the living conditions of the nascent working class. The habit of neglecting environmental issues among later Marxists also seems to result from the belief that, at the end of the history of the class struggle, all of humanity's problems will be resolved.

[iii] In the case of the price of oil, for example, only the cost of extraction, on the one hand, and the quantity demanded, on the other, come into consideration. When, in a given situation, demand falls, this has the effect of increasing the stock of oil already extracted in the reservoirs, establishing a tendency to reduce the price, and vice versa. If new, more accessible deposits are discovered, the cost of extraction will tend to fall, also associated with a tendency to reduce prices, and vice versa. Therefore, the price of oil, the quantity of which exists on the planet is fixed, and which, therefore, will one day inevitably reach complete exhaustion, ends up being determined in the same way as that of a commodity agricultural, whose production can be maintained indefinitely in a continuous flow, as it depends only on the existence of background factors and non-exhaustible flow factors.

[iv] If the price of oil incorporated this “true” scarcity, certain amenities of modern life, such as the private automobile, would be economically unviable. O American way of life It can therefore be seen as a distortion resulting from this failure.

[v] Such scenarios were relatively common in his youth in Romania and other Eastern European countries.


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