Re: new thread: PKT and ecology

["schulte-baeuminghaus" <cresscourt@xxxxxxxxx>]

Title: Re: new thread: PKT and ecology

Bill,

I think the real answer is that until you get the sort of full-employment, high real investment, rising productivity and production that will provide the necessary margins, you will never get the extent of attention to the environment that we so badly need.
Short of a return to an adjusted Keynesian system that will give us the required margins, we will always get so much political, social and economic opposition/protest against sacrificing present to future needs that effective action to protect the environment will be impossible.
We need to take a more enlightened look at what the real situation is.
We do not have a pie of a fixed and permanently immutable size.
The size of the pie changes partly because of variations in natural and other physical resources but much more because of policies of governments, banks, public and private enterprises - and of course the concepts that drive, motivate or impede them.
We must acknowledge too that the nature of the pie changes.
The pie once used to be mostly agricultural.
The pie then became mostly manufactured.
The pie is now - at least for some of the biggest countries - mostly made up of services.
Given that the size of the pie is not fixed and that its components can change, our task as economic policy-formers should be to make the pie as big as possible and made up of components as benign as possible, to meet as many of the varied needs of the people and their planet as can be managed.
We'll never do it by slicing hunks off the pie and giving up on the ingredients and their alternatives we can most sensibly manage to put into it.



James Cumes

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From: Bill Mitchell <ecwfm@xxxxxxxxxxxxxxxxxxxxxxx>
To: pkt@xxxxxxxxxxxxxxxx
Subject: Re: new thread: PKT and ecology
Date: Thu, Mar 22, 2001, 4:59 am

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
Phone: +61-2 4921 5065
Fax:   +61-2 4921 6919  
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WWW Home Page: http://econ-www.newcastle.edu.au/economics/bill/billeco.html