Re: post keynesian economics and environmetal sustainablity

[Ted Winslow <egwinslow@xxxxxxxxxx>]

Mat wrote:

> Stephen Marglin
> has an essay some years back where he talked about uncertainty in
> environmental and uncertainty in Keynes, and he said that in Keynes,
> investors are uncertain but we need action in the face of uncertainty
> (animal spirits), 'otherwise there would not be much investment' just
> based on cold calculation. But in the case of environmental
> uncertainties we don't want action in the face of uncertainty, but
> caution. mat

As I've pointed out before, Keynes himself addresses this point in his
biographical essay on Jevons.  He claims there that Jevons - in his argument
about coal - erred on the side of excessive caution because of a

"psychological trait, unusually strong in him, which many other people
share, a certain hoarding instinct, a readiness to be alarmed and excited by
the idea of the exhaustion of resources." (X, p. 117)

Since his economics makes this instinct the foundation of the psychological
reaction to uncertainty in capitalism (a system based on "the social appeal
to the hoarding instinct as the foundation of the necessary provision for
the family and for the future" IX, p. 269), the implication is that there is
a psychological tendency in capitalism to overestimate the user cost of
current resource use.

Where the consequences of alternative courses of action are completely
unknown and unknowable (true uncertainty), how can consequences rationally
be made the basis for preferring one course of action to another?

Ted