The Wealth of Nature: How Mainstream Economics Has Failed the Environment Book

Virtually all of the large-scale damage to the global environment is caused by global economic activities, and the vast majority of economic planners in both business and government have been trained in neoclassical economic theory. In this hardhitting book, Robert Nadeau first demonstrates that the central legitimating construct in neoclassical economics, Adam Smith's invisible hand, is a product of eighteenth century Deism and that Smith's understanding of the "natural laws of economics" is based on metaphysical assumptions. Nadeau then shows that the architects of neoclassical economics, all of whom were trained as engineers, incorporated Smith's assumptions about the lawful dynamics of market systems into a mathematical formalism borrowed wholesale from a soon-to-be outmoded mid-nineteenth century physics. Absurdly, these now-famous economists substituted economic variables for the physical variables in the equations of this physics, and this became the basis for the totally specious claim that they had transformed the study of economics into a rigorously mathematical discipline comparable to the physical sciences. The fact that neoclassical economic theory is premised on metaphysical assumptions that were incorporated into an increasingly elaborate mathematical formalism that has nothing to do with the real or actual dynamics of the economic process was soon forgotten. But this is not, as Nadeau convincingly demonstrates, an intellectual curiosity with no real world consequences. Our willingness to view blatantly unscientific assumptions about the alleged "lawful" workings of market systems in mainstream economics as scientific not only disallows the prospect of realistically accounting for the environmental impacts of economic activities. It also provides an enlarged basis for understanding why the manner in which we are now coordinate global economic activities is a program for ecological disaster. To avoid the prospect of large-scale irreversible damage to the global environment imperiling billions of people, we have only one option, according to Nadeau: we must displace neoclassical economic theory with an environmentally responsible economic theory.