Monday, August 5, 2013


Housing stimulusThe words economy  and ecology both derive from the Greek oikos, home.  That makes sense. The planet really is our home, and it's natural to think about our stewardship as a kind of "domestic economy" writ large.

But in some ways the analogy is seriously misleading.  Especially when we start trying to think about the resources available to our "household".

For a single household (in the developed world), money is usually the limited resource.  We have a certain amount; we use ("spend") it once; it's gone.  We may get something in return, but as far as the individual household is concerned that money is lost forever.

Economists regularly have to explain that this is not true for the economy as a whole.  The money I spend buying something from you is not thereby dissipated beyond return; it ends up in your pocket.  The total economy does not dissipate money, for money cannot be destroyed.  (In fact, this symbol of materialism could be the most "spiritual" thing with which we regularly interact!)

So the resource we worry most about wasting turns out, from a global perspective, to be inexhaustible.  We are indulging a "limited money illusion".

On the other hand, for a single household (in the developed world, again), stuff presents itself as effectively inexhaustible.  The world is a giant Wal-Mart.  There is no shortage of goods that cry "Buy me!"  And even if some shelves are empty for a moment, that is only temporary.  The ships, the trucks, will soon arrive to restock them.

But from the perspective of the economy as a whole, this too is a mistake.  Unlike the endless recurrence of the money cycle, the journey of "stuff" really is a one-way journey: from resource to waste.  Some resources are more limited than others, but none is inexhaustible.

So when we identify ourselves as consumers first and foremost (as in a recent Facebook meme that states: "Progressives need to hammer home the point that the real job creators are consumers"), we are indulging an "unlimited stuff illusion".

On both points (money and stuff), our natural extrapolation from household experience yields an illusion.

Image from 1926 Sears catalog.  Courtesy of Flickr user arbyheather, licensed under Creative Commons. 


Evan said...

Well, monetary value does disappear from the stockmarket. Which is a bit different to it being a limited resource

Eclipse Now said...

I see your point: there are limits. But we may not have hit them yet. Plasma burners allow us to recycle everything we use at the atomic level. (The only thing these cannot recycle safely are radioactive wastes). While there are many recycling schemes we can and should be using to prevent paper and glass and even some organics even going into the trash in the first place, we can now even recycle landfill. Old pizza boxes and dirty diapers and jogging shoes can now be turned into sunglasses, roof tiles, fluffy insulation and even faux wood panels for the side of the house.

If landfill really can clad and fit out about half our next home, surely that reduces some of the environmental impact?