Axiology – The Economics of Spaceship Earth

Fifty Island or Isla Cincuenta is a tale of economics by Francisco Ortega Martinez, who describes an island economy based on human values and a continuous re-distribution of money. The story, in two parts, tells us about the economic life of the island community and their experiment in finding a new way of living together. It is made in the form of a powerpoint presentation, (Chapter I and Chapter II) which you can download either in English or in Spanish from this page:

“Fifty Island”, a tale to understand axiological economics.

Axiology, of course, is the philosophical study of value – a study of human values based on aesthetics and ethics. ( Axiology )

The story is an explanation, in simple terms, of an experiment Francisco Ortega has developed, and for which he wrote a program (in php) that can be installed on a server and made accessible to any group of participants wishing to do the experiment. The program, and some information about it, can also be found on the “Fifty Island” page already linked above.

Both the story and the program are based on a paper by Kenneth E. Boulding titled “The Economics of the Coming Spaceship Earth”.

In it, Boulding states that our human economy is part of, and must exist in the context of, the ecology of its surroundings. The ability of those surroundings, the larger ecosystem in which we live, to provide inputs of material and energy, and to absorb outputs of pollution, is limited by the fact that planet earth is a sphere with finite capacities of regeneration. It is as if – in Buckminster Fuller’s conception – we lived on a spaceship and while traveling on our common journey had to make do with the very finite resources that are available.

According to Boulding, humanity must take an evolutionary step away from the “cowboy economy”, the free-for-all of production and consumption, towards what he calls the “spaceman” economy, where production and consumption give way to continuous sustainable reproduction.

The paper by Boulding, discussing an ecological approach to economics, is a very interesting read. It can be found on the site of dieoff.org:

THE ECONOMICS OF THE COMING SPACESHIP EARTH

Some quotes:

Systems may be open or closed in respect to a number of classes of inputs and outputs. Three important classes are matter, energy, and information. The present world economy is open in regard to all three. We can think of the world economy or “econosphere” as a subset of the “world set,” which is the set of all objects of possible discourse in the world. We then think of the state of the econosphere at any one moment as being the total capital stock, that is, the set of all objects, people, organizations, and so on, which are interesting from the point of view of the system of exchange. This total stock of capital is clearly an open system in the sense that it has inputs and outputs, inputs being production which adds to the capital stock, outputs being consumption which subtracts from it.

From the point of view of the energy system, the econosphere involves inputs of available energy in the form, say, of water power, fossil fuels, or sunlight, which are necessary in order to create the material throughput and to move matter from the noneconomic set into the economic set or even out of it again; and energy itself is given off by the system in a less available form, mostly in the form of heat. These inputs of available energy must come either from the sun (the energy supplied by other stars being assumed to be negligible) or it may come from the earth itself, either through its internal heat or through its energy of rotation or other motions, which generate, for instance, the energy of the tides. Agriculture, a few solar machines, and water power use the current available energy income. In advanced societies this is supplemented very extensively by the use of fossil fuels, which represent as it were a capital stock of stored-up sunshine.

The closed earth of the future requires economic principles which are somewhat different from those of the open earth of the past. For the sake of picturesqueness, I am tempted to call the open economy the “cowboy economy,” the cowboy being symbolic of the illimitable plains and also associated with reckless, exploitative, romantic, and violent behavior, which is characteristic of open societies. The closed economy of the future might similarly be called the “spaceman” economy, in which the earth has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system which is capable of continuous reproduction of material form even though it cannot escape having inputs of energy. The difference between the two types of economy becomes most apparent in the attitude towards consumption. In the cowboy economy, consumption is regarded as a good thing and production likewise; and the success of the economy is measured by the amount of the throughput from the “factors of production,” a part of which, at any rate, is extracted from the reservoirs of raw materials and noneconomic objects, and another part of which is output into the reservoirs of pollution. If there are infinite reservoirs from which material can be obtained and into which effluvia can be deposited, then the throughput is at least a plausible measure of the success of the economy. The gross national product is a rough measure of this total throughput.

By contrast, in the spaceman economy, throughput is by no means a desideratum, and is indeed to be regarded as something to be minimized rather than maximized. The essential measure of the success of the economy is not production and consumption at all, but the nature, extent, quality, and complexity of the total capital stock, including in this the state of the human bodies and minds included in the system. In the spaceman economy, what we are primarily concerned with is stock maintenance, and any technological change which results in the maintenance of a given total stock with a lessened throughput (that is, less production and consumption) is clearly a gain. This idea that both production and consumption are bad things rather than good things is very strange to economists, who have been obsessed with the income-flow concepts to the exclusion, almost, of capital-stock concepts.

I do recommend you read the entire paper, to get a better idea of what Boulding is trying to communicate.

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