Re: new thread: PKT and ecology

[Bill Mitchell <ecwfm@xxxxxxxxxxxxxxxxxxxxxxx>]

Stephen Block wrote:

>  Some intriguing issues have been raised
> by environmentally-minded students
> concerning the long-term viability of the Keynesian growth model given
> the
> (from their point of view) apparently unsustainable nature of the planet
> as
> we know it if current levels of consumption are maintained and/or
> increased.
> I have tried to offer a way of going down the middle suggesting that we
> need
> not accept the dichotomy between jobs and the environment posed by
> conservatives; that perhaps we can add environmentally sustaining jobs
> to
> the economy, etc. And I am reminded that Shumiacher (SP?__Small is
> Beautiful_), was a disciple of Keynes. When it is added that Keynes
> believed
> in the growing satiety of demand within the 20th century ( a belief
> not
> borne out), and that he would have been relatively sympathetic to
> the
> environmental movement, it provides a (albeit insufficient) beginning
> to
> finding some compatibility. But given the post-Keynesian emphasis
> on
> aggregate demand sustainment and elevation (very understandable
> especially
> given our present circumstances) does this, at least  temporarily,
> cast the
> green in us overboard, or is there literature or ideas out there on
> the
> development of a distinctly green Keynesianism, or on an ecology steeped
> in
> Keynesian-compatible economy?


In my view this is one of the serious shortcomings of the standard
Keynesian and 
Post Keynesian line. The goals of PK(macro)T should include:

(a) full employment
(b) price stability
(c) environmental sustainability.

Standard Post Keynesian view also fails to
take into account issues of environmental sustainability. 
Even if it was possible to expand demand enough to promote growth
sufficient to keep pace with 
labour force growth and productivity growth and mop up the huge stocks of
long-term unemployment, 
how could the natural ecosystems, already under great strain, cope?

This is one of the considerations for design of the Job Guarantee
approach to (a), (b) and (c) above.
The Job Guarantee proposal enhances a strategy that aims to reduce the
environmental problems. 
There is a need to change the composition of final output towards
environmentally sustainable activities. 
These are unlikely to be produced by the private sector because they have
heavy public good components. 
They are ideal targets for public sector initiative. If the unemployed
workers are deployed in these areas 
of activity, the individuals gain a restored personal dignity and the
society gains from the increased 
provision of environmental sensitive goods and services. It is not
increased demand per se that is 
necessary but increased demand in certain areas of activity. 

best wishes
bill

------

William F. Mitchell

Professor of Economics and Head of Department

Director, Centre of Full Employment and Equity

University of Newcastle

New South Wales, Australia

E-mail: ecwfm@xxxxxxxxxxxxxxxxxxxxxxx

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