The stationary state in political economy

The environmental strategy behind the market solution supposes that all significant long-period problems associated with economic growth in an economy-environment system of fixed mass may be resolved in the marketplace. It supposes that economic signals generated in the course of transactions between economic agents will be sufficient to head off such global depletion and pollution disasters as those predicted by the Club of Rome. More particularly, it supposes that the negative feedbacks of the price system will ensure that rational economic agents cannot overexploit their environment. It is important to appreciate, though, that the market solution represents an historically unique environmental strategy, and an historically unique sense of rationality. It has no direct parallels in other societies. Indeed, it shares very few features with the environmental strategies of other societies.

To understand the differentia specifica of the market solution it is useful to look at other environmental strategies. Although this takes us beyond the bounds of the modern economy, and beyond the rationality of modern economic theory, it addresses similar issues to those raised in various modern debates about the environmental implications of economic growth. The Club of Rome debate, for example, was largely about alternative environmental strategies. The antigrowth elements in the arguments of Forrester et al. were, at the same time, positive pleas for a more quiescent approach to the management of the environment.