1990s >> 1994 >> no-1081-september-1994

Book Review: ‘Ecology, Policy and Politics – Human Well-Being and the Natural World’

The Costing of The Earth

‘Ecology, Policy and Politics: Human Well-Being and the Natural World’. by John O’Neill (Routledge. £11.99.)

This book is an attack on the philosophical basis of so-called “cost-benefit” analysis as a method for deciding whether or not some project with consequences for the environment should go ahead. Cost-benefit analysis involves giving a monetary value to the costs (e.g. loss of amenities, destruction of wildlife habitats, pollution) and benefits (e.g. some new amenity, more jobs, journey times saved).

What price the market?

The value of a landscape or habitat is calculated as what people would be prepared to pay, either directly or in terms of monetary benefits forgone, to retain it. If, in the end, the monetary value of all the benefits is greater than the monetary value of all the costs, then the project should go ahead. This in fact is how such decisions are made today.

O’Neill argues that such a method does not protect the environment as it takes people’s preferences as they have been shaped by capitalism which encourages us to judge everything in terms of how much money it brings or saves us as individuals. Given this, cost-benefit analysis will always reflect the fact that most people prefer to have more money over all other considerations and often have no real choice in the matter. Much of O’Neill’s book is written in the technical language of moral philosophy and so will be of interest mainly to students studying that subject. A couple of chapters, however, in respectively, “pluralism, incommensurability, judgement: (Chapter 7) and “market, household and politics” (Chapter 10), will be of wider interest.

In the first of these O’Neill argues that cost-benefit analysis is misconceived in seeking to reduce everything to a single common unit (monetary value). The anti-socialist von Mises even argued that, unless everything had a price tag, it would be impossible to make a rational choice between two alternative projects or methods of production. O’Neill replies that this is nonsense: comparisons and choices can be made on the basis of other considerations than monetary costs, as had been pointed out by the Austrian Marxist (and later logical positivist philosopher) Otto Neurath:

    “For Neurath, a socialist economy, since it was to consider the use-value of goods only, would have to be an ‘economy in kind’. In such an economy, while physical statistics about energy use, material use and so on would be required, there would be no need for a single unit of comparison. Thus in 1919 he wrote in a report to the Munich Workers’ Council that, in considering alternative projects: ‘There are no units that can be used as the basis of a decision, neither units of money nor hours of work. One must directly judge the desirability of the two possibilities.’ Such direct comparison will need to appeal to political and ethical judgements, including concern for future generations.”

Making informed practical judgements on the basis of past experience and general policy considerations will no doubt be what will happen in socialism. Money won’t come into it, nor the insane attempt to put a price tag on everything.

In the other, final chapter, O’Neill discusses two alternative ways that have been suggested for making decisions about the environment on a non-market, non-monetary basis. The first is to restrict the operation of the market to a defined sphere, not including environmental matters. The other is to abolish the market altogether. O’Neill opts for the second, rejecting the first on the following grounds:

    “within the economic sphere itself to leave the allocation of most resources to the market is incompatible with the realization of environmental goals. The market responds only to those preferences that can be articulated through acts of buying and selling. Hence the interests of the inarticulate, both those who are contingently so – the poor – and those who are necessarily so – future generations and non-humans – cannot be adequately represented. Moreover, a competitive market economy is necessarily oriented towards growth of capital, and such an orientation is incompatible with a sustainable economy.”

In other words, what O’Neill calls a “non-market order” is the only framework within which humans can organize their interaction with the rest of nature in ecologically acceptable ways.

Adam Buick

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