A Better Future for the Planet Earth
I. Birth - Childhood (1938-)
I was born in Houston, Texas in 1938. My grandparents on my father's side were immigrants from Ireland, and my grandparents on my mother's side were from Germany. Both sets of grandparents passed away before I was born, so I do not know much more than that.
May parents were unable to attend university because of the Great Depression, and so they started working very early. My father was a hard worker and was able to open a retail store handling carpenter's tools. I also worked at his store part time between the ages of 12 to 21, and the experience taught me a lot. I have a younger sister who is teaching Spanish literature at a university. My father taught us the importance of independence, and my mother taught us to be sincere and ethical. We were very lucky to have been raised by affectionate and wise parents.
Although I was a shy child, I liked swimming, playing tennis and reading books. At different times during my childhood, I wanted to be a doctor, priest, chemist, and a novelist. When I was seven, I contracted polio. My body was partially paralyzed and I was hospitalized for two months. When I was released from the hospital, my left hand was completely paralyzed, which prevented me from participating in sports with the exception of swimming. For this reason, I found myself reading more. Despite treatment, by the time I was 14 years old, my left hand had completely atrophied and was causing various complications. The doctors decided to amputate. As traumatic as this was, it stopped me from wasting my time hoping I would recover and saved me from using lots of energy going through treatment that would be of little or no benefit. This painful experience taught me to concentrate on what I am able to do and not waste energy on things that I can't do.
Fortunately, for a half century after losing my hand, I have been spared the aftereffects of polio. In addition to the normal problems that come with age, however, I have recently experienced physical weakness and fatigue due to the loss of motor nerve and the excessive load on healthy motor nerves because I had polio as a child.
II. Universities (Rice University - Vanderbilt University - 1967)
I was interested in humanities as well as science. When I had to choose between the two, I decided to study economics in preparation for a major in the social sciences, which was rooted in both the natural sciences and the humanities. I thought that economics was situated between the natural sciences, which are related to resources, and the humanities, which are related to ethics and human goals. In fact, the primary economists in the classical school thought in this way. However, the neo-classical school of economics that I studied was different and disappointing. I decided to study economics with the goal of restoring biophysics and ethics to the field. I needed to convert my disappointment into motivation.
Biophysics covers all aspects of human life, physics, biology, natural resources, energy and ecology. This was appealing to me because it didn't force me to choose between the natural sciences and the humanities. I was very lucky that the teacher who taught the history of economics was excellent. I was strongly influenced by a book he had assigned, "Personal Knowledge," by Michael Polanyi. My classes provided me with beneficial knowledge of the unknown world and motivated me greatly. Traditionally, the history of economics is a required subject; however, it has since been removed from the curriculum and is rarely taught. Economists these days probably think that they have already learned enough from the failures of the past. However, I believe that it is also a problem if we place too much emphasis on the theoretical and actual phenomena.
After taking my bachelor's degree, I went on to graduate school at Vanderbilt University in Nashville, Texas to study economic development with an emphasis on Central America. I chose economic theory and statistics, which were taught by Nicholas Georgescu-Roegen, as required subjects. These two courses were extremely stimulating and motivated me to study more. I applied what I learned to research on economic growth in Central America. Since I was born and raised in Texas, I studied Spanish and was quite attracted to Central America and Mexico. My doctoral thesis was on currency exchange rates as a way of implementing economy and development plans in Uruguay. Besides studying, I enjoyed playing tennis, reading books on philosophy, theology, and science, and interacting with friends.
III. Teaching at Louisiana State University, etc. (1968 - 1983)
After acquiring my doctorate in economics, I taught at Louisiana State University. I had many great teachers that I respected and appreciated; and I wanted to be for younger students what my teachers were for me. While I was teaching at the university, I explored environmental economics, which includes aspects of the environment, regional society, quality of life, and ethics. In the 1960s, the environment was not valued in economics; so I was a pioneer.
In 1968, I was invited by the Federal University of Ceara to be a guest professor. This was through a project undertaken by the Ford Foundation to cultivate students from the northwestern part of Brazil, where poverty was a serious issue, by giving them the chance to study overseas. This specific project was designed to cultivate economic specialists capable of addressing regional poverty. In 1969, I carried out a demographic study on the population increase and economic growth in the northern part of Brazil, and examined Malthusianism and Marxism for one year as a researcher at the Yale University.
Through my teaching and research in Brazil, I started understanding that population growth increased poverty and caused income disparity. During that period, I reread On the Stationary State by John Stuart Mill and examined the content with the disorder and limited effects of economic growth learned from Georgescu-Roegen.
Steady state economy was a concept developed by classical economist John Stuart Mill (1806-1873). A steady state economy is a social state whose capital and population are a stable size. However, the limited capital and population are complemented by reproduction. Mill's theory is different from those developed by many other economists or from general concepts based on economic growth. He valued societies with steady state economies as the stable societies that consider quality of life. Mill's theory was valuable because he explained for the first time from an economic perspective the importance of differentiating time for work from time devoted to improving the art of living. He paid attention to the quality of life as well. He described in his book Essays on Economics and Society that it is scarcely necessary to remark that a stationary condition of capital and population implies no stationary state of human improvement. He went on to say that there would be as much scope as ever for all kinds of intellectual culture, and moral and social progress; as much room for improving the Art of Living and much more likelihood of it being improved, when minds cease to be engrossed in the art of getting on.
I have studied the relationship among the economy, environment and ethics for a long period of time. The study I carried out in the northwestern part of Brazil between 1967 and 1968 made me realize the extreme importance of work in this field. According to traditional theory, economic growth was the best method for solving ethical failures that arose. This means, for example, that everyone would benefit. In addition, environmental issues were thought to have no impact on economic growth, or at least create no problems that science and technology or alternative resources could not overcome. Through my study on policies in developing countries, I concluded that energy issues in developing countries cause the most serious environmental problems, and that these are also associated with deforestation and agricultural issues. This increased people's awareness that the costs of economic growth were larger than we thought.
I summarized theories developed by economists in the past and published them in Towards a Steady-State Economy in 1973. It was my dream to collect and publish the powerful work written by economists who were of my teachers' generation and which were critical of economic growth in a way that my students and general readers could understand. These were serious works and included articulate criticisms of excessive dependence on economic growth. This publication made me more confident about my thinking on economic growth; however, strong criticism was levelled at me from many economists.
In addition, in the middle of 1980s, I founded the International Society for Ecological Economics with Professor Robert Costanza, my co-worker at Louisiana State University, with support from Joan Martinez-Alier in Spain and the late Ann-Mari Jansson in Sweden. It was founded to promote mutual understanding between economists and environmental specialists. It was first an international gathering; however, it evolved into an organization with branches in many countries and regions. They hold national and international conferences every two years. I also jointly founded the journal Ecological Economics with Professor Costanza to promote active discussions in the field.
In 1980, I carried out population research at the Center for Resources and Environmental Studies, Australia National University for three months and gave a presentation on the influence of a stable economic state on the balance of population and resources. After that, I gave lectures in Brazil as a Fulbright Senior Lecturer, and conducted research at Yale University. In 1983, I returned to Louisiana State University to teach economics and developed a new program for the study of population, environment and economic development.
The main reason that I was interested in Brazil was that I had met my wife, Marcia, there. We've been married for 50 years. She was an exchange student from Brazil studying at Peabody College near Vanderbilt University, where I was studying. After my graduation, I was invited to Brazil as a guest researcher, and we continued our relationship. We married in 1963 when I was 25 years old. Brazil, therefore, is my second home.
IV. As a Senior Economist, Environment Department, World Bank (1988-1994)
1. The World Bank
I left my post at the university in 1988 to become a Senior Economist at the Environment Department of the World Bank. Economics at the university had become conservative and emphasized existing styles only, which I could no longer accept. At that time, the neoclassical school's influence had increased, and the focus had become narrower and more conservative. They did not even look at resources or the environment, or ignored them more often than not when they did. This tendency was seen strongly in the Louisiana State University Department of Economics; and this came into conflict with my theory, which emphasized resources and the environment, and this made it more difficult for me to remain. Therefore, I decided to leave the world of academia and shift to a more practical and active field before entering my 50's.
I was very grateful to have received an invitation to join the World Bank. The World Bank received pressure from the government agencies and environmental NGOs to consider environmental costs along with economic growth. Therefore, the World Bank asked the late Dr. Robert Goodland, who passed away this year (2014), to become a Senior Economist at the Environment Department for Central America. He was the first ecologist hired by the World Bank. I was known as critical of economic growth without consideration of the environment, so it was a big surprise for me that the World Bank, whose basic policy was economic growth, offered me a job. Dr. Goodland was head of the Environment Department for Central America and insisted on hiring me against opposition from other employees. He was my supervisor and my instructor, and it was an honor to have been able to work under him for six years. He once taught in Brazil before joining the World Bank, and he also learned tropical ecology from Professor Daniel H. Janzen. I was deeply moved by the fact that Professor Janzen and I, who are acquaintances of Dr. Goodland, received the Blue Planet Prize together this year.
2. Index of Sustainable Economic Welfare (ISEW) and Herman Daly's Three Rules/ Pyramid
In the following year, Dr. John B. Cobb Jr. and I developed the Index of Sustainable Economic Welfare (ISEW) as a more effective index than GDP to measure socio-economic growth, and released as a reference to supplement both the basic concept and theoretical discussions attached to For the Common Good, which was published in 1989. This jointly published book proposed a new economic model that emphasized the environment, regional society, and ethics. It attracted the attention of the industrial, academic and political worlds, but it also caused a significant amount of controversy and was met with a certain amount of skepticism.
The purpose of presenting the ISEW was to provide a basic example of the principle separate from statistical measurements. Dr. Clifford W. Cobb, son of Dr. John B. Cobb Jr., was a major contributor to its development. While GDP is problematic, the ISEW provides an accurate indicator of growth. In order to make it even clearer, however, we separated the primary and secondary issues in measurement. Numerical data can always cause confusion, so it is up to the author to make it clear.
Dr. John B. Cobb Jr. and his son Dr. Clifford W. Cobb asked renowned economists to review and critique the ISEW for revision before publication of The Green National Product. They were also involved in second version of For the Common Good, which included a significant improvement in the description of the ISEW. In the postscript of the second version, we also included a section on the influence of currencies, financing and cost of economic growth, which were also important points that we had overlooked in the first version.
I also developed Herman Daly's Three Rules, three essential principles of sustainable human society, and Herman Daly's Pyramid.
Herman Daly's Three Rules
- The sustainable use of renewable resources requires that consumption not be greater than the rate at which resources regenerate.
- The sustainable use of nonrenewable resources requires that the rate of consumption not be greater than the pace at which renewable substitutes can be put into place.
- The sustainable pace of pollution and wastes requires that production not be greater than the pace at which natural systems can absorb, recycle, or neutralize them.
In addition, Herman Daly's Pyramid was conceived from the question of whether economic growth truly leads to improvement in the quality of life.
The pyramid transcends elements of the economy that can be conjured up under normal circumstances - "artificial capital (factories, facilities, etc.), human capital (labor, knowledge, skills), financial capital," and added natural capital - which envelope the economy's potential and limitations, as well as social and human capital. As shown in this pyramid, it consists of intermediate stages of normal economics in between the ultimate purpose of well-being placed at the top and natural capital placed at the bottom.
3. As a Senior Economist at the World Bank
My theory worked against the World Bank's traditional model of economic growth, a model that entailed significant cost, and so was not favorably received. Complying with my three rules meant limiting economic growth to include other goals. Although the ultimate purpose of the World Bank is the eradication of poverty, we differed on how this could best be accomplished.
Senior Economist sounds like a high ranking position. However, it follows behind the Principal Economist, Lead Economist, and Chief Economist, that is the top position. What I did was to assist Dr. Goodland in researching and evaluating applications to the World Bank's loan project for dams, roads, airports, schools, farms and power stations in Central America, and classifying the predicted influence on the environment into categories. For the projects whose influence on the environment was serious or was likely to be serious, we made proposals to reduce the environmental load; however, these were not accepted by the executives or debtor nations due to their high cost.
After this, I was transferred from the Project Section at the Environment Department to the Research Section. The term "sustainable development," which was presented by the World Commission on Environment and Development (WCED) (Brundtland Commission), became trendy and everyone agreed to adopt this term; however, the definition was not clear. Actually, some wanted the term to remain vague because a clear definition of "sustainable development" would require significant change. Therefore, it was used to mean "desirable development." I proposed the three above-mentioned rules for sustainable development, which attracted attention outside the World Bank, but they were criticized within the World Bank because it was thought that my rules would delay economic growth and make it more difficult to obtain approval for each project. Meanwhile, inside the World Bank, some tried to reform the GDP accounting system to reflect environmental costs, but this was to little or no avail.
If the term "sustainable development" means "development" is "sustainable," then I do not agree with the idea because "development" conflicts with "sustainability." However, the Brundtland Report was successful in a way because it made people aware of the issue of sustainability. If we would like to cease economic growth for true sustainability, we should follow my three rules. However, since the rules conflict with economic growth, "sustainable development" was interpreted as "sound development," which I of course could not accept. When I explain my idea to my grandchildren, they all say, "We already know about it." The sustainable development that I proposed was that simple.
In the end, my three rules were not adopted. However, Dr. Goodland took the initiative in the development of limited environment assessment standards, which enabled the World Bank to limit investment in cigarettes, provide compensation for residents who were forced to move due to dam construction, take measures for the protection of the original inhabitants, provide technical safety and ensure public health. Policy standards along with the broad meaning of "sustainable development" were not included due to conflict with their goal, which was economic growth. However, economic growth should be handled appropriately. With little consideration to welfare, economic growth is of little benefit.
While I was with the World Bank Research Department, I worked on projects for Central America and traveled to Paraguay, Brazil, Ecuador, Costa Rica, and Thailand. I carried out research on the environmental capacity of xerophile forests in Paraguay and the Amazon, participated in policy conferences on sustainable growth held in Europe and the United States, and was involved in some projects related to the Rio Summit.
V. As a Professor at the School of Public Policy, University of Maryland (1994-2010) and a Senior Researcher (2010-Present)
After six years at the World Bank, I taught six years at the University of Maryland. I did not belong to the School of Economics, but the School of Public Policy, where my experience in developing policy at the World Bank was extremely useful. Many of my students went on to work at the World Bank. Compared with the School of Economics, faculty at the School of Policy were more sympathetic to my ideas about growth and the environment. Throughout my more than 40-year experience teaching, I taught students the need for policies that would benefit people.
VI. Comparison of GDP and ISEW
Compared with GDP, which has been used as the indicator of national economic power, ISEW is more capable of comprehensively reflecting expenditures and gains, which compensates for the defects in GDP regarding the inequitable distribution of benefit, hours spent on housework, the deterioration of natural resources, and external debt. GDP is a simple indicator of cost and profit. If gains exceed expenditures, GDP is considered to have grown. GDP, therefore, lacks the detail included in ISEW.
As a method of measuring social economic growth, ISEW is superior to GDP; however, it is not yet a perfect indicator of welfare. ISEW is based on individual consumption and prices, as GDP is, which reflects only a part of social economic effects. ISEW corrected the unfairness in the allocation of benefits by taking into account the marginal utility of incomes between the rich and poor; however, ISEW has not been corrected to decrease the marginal utility of incomes when total income grows. I believe that the major contribution of ISEW has been to calculate the most fundamental costs associated with economic growth, screen expenditures and gains, and clarify growth utilizing GDP as one indicator. In the future, expenditures and gains should be separated, and margins should be compared rather than net figures. Theoretically, the results would be the same; however, the separation of expenditures and gains would promote greater understanding and make it easier to establish policies.
ISEW is not used as a national indicator in the United States, but it is used by some states and national organizations. Based on this sustainable indicator, social economic growth in the United States has been measured every two years from 1959 to 1990. This revealed that the GDP continued to increase in and after 1970; however, the average level of welfare had not changed since 1970, which was a shock to society. The shock was a reaction to the externality and disparity of income. ISEW continued to improve, and was renamed the General Progress Indicator (GPI); and its applications have continued to broaden. However, in spite of these improvements, the national government continues to use GDP as an indicator, which is disappointing. The United Nations has started utilizing the Satellite Account, which includes a flow of resources; however, it has not yet been integrated with national accounting indicators such as GDP.
For the Common Good was Dr. John B. Cobb Jr.'s and my attempt to make the economy suitable for regional society, the environment, and a sustainable future. Standard economics is based on individualism, but we thought it would be better to shift our focus to regional society. In other words, a shift to a community in which everyone could live together regardless of income, the present and future, fundamental values, and species other than humans which are essential for maintaining life.
When I proposed my three rules in the 1980's, everyone thought of natural resources as unlimited, and no one thought about their ever vanishing. However, awareness about the depletion of resources has changed. Despite this, economic theories have remained pretty much unchanged from the time we had sufficient natural resources. This needs to change. Maintaining an appropriate balance between economic growth and nature to ensure sustainability is very important. If growth exceeds the ability for nature to absorb it, the state of the economy will become worse and worse. The three rules I proposed clarified the need to ensure that our economic activities did not exceed sustainable levels. However, even though the theory has been recognized, the political response is still lacking. Of course, I do not expect change to happen immediately; but I do hope to see gradual change.
If we continue consuming natural resources as we have been, we will fall into poverty not in the future, but in our lifetime. The cost of the economic growth based on the sacrifice of nature will exceed profitability through the expansion of production, and economic growth will not produce gains. To prepare for the future, it is necessary to shift from the pursuit of economic growth to a steady economy that supports life and maintains sustainability. The reason economic growth without the sustainable use of resources is problematic is that growth continues until capacity is exceeded, at which point competition for ever dwindling resources quickly leads to conflict. Economic growth in wealthy countries increases environmental and social costs beyond profitability, which negates gain. However, this idea may also differ depending on the method of calculation employed. For this reason, my theory may leave room for debate.
We also need to reconsider our desire to acquire goods. We should ask ourselves if our happiness is in greater consumption, or if our happiness is in leisure, having time for family and friends, or in the pursuit of knowledge. We need to ask ourselves what real happiness is while improving our sense of ethics. If we seek growth that exceeds resources, we will create pain for ourselves. We once had plenty of forests and people suffering from poverty; therefore, economic growth was meaningful. The solution to poverty is not the redistribution of capital, but equal growth. In this sense, it is reasonable for us to think about returning to lifestyles of the past.
It is not easy to change the way others think, but it is necessary for us to keep learning, accept the reality of our world and respond to that reality. Although it is hard to change the way others think, it is possible to change the rules by which we live. This is not easy either because in a democratic society, the majority decides; and it is easier to convince people of the short-term benefits of economic growth that it is to get them to change their consumer behavior. Although it is impossible to change this in the short run, I am hopeful that can be achieved over time.
We also need to recognize that we cannot live without all the other species in the ecosystem. Economic growth is associated with the consumption of resources and energy that cannot be replaced. In the end, it will create a state of unbalance in the economy and ecosystem. Biology and bio-literacy help us to recognize the need to maintain the ecosystem and the cost of repairing the damage if we do not change our habits. For a long time, we have had plenty of resources. This enabled us to put aside problems related to economic growth. Now, however, we are required to deal with the deterioration of resources in economics. Once resources become insufficient, people finally start think about them. This is where we are now, and interest in the environment is slowly increasing.
VIII. About Myself
My wife Marcia has been a wonderful partner for me during our more than 50 years together. Without her cooperation and understanding, I would not have had this wonderful and fruitful life. We have two daughters and three grandchildren. Once I loved playing tennis, swimming, and taking walks, but nowadays, I cannot swim or walk without effort. Currently, I enjoy reading and watching movies. I like spending holidays on the coast and being with family and friends. At my age, my past is longer than my future, and I am filled with memories and gratitude rather than plans for the future. My dream is that everyone on the earth will strive for sustainability to ensure that everyone can enjoy a happy life.