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Date: | Fri Mar 31 17:18:51 2006 |
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This is not altogether different to my question regarding technology in that
technology is defined in most textbooks quite simply by the production
function, the current state of knowledge as how to best combine factor
resources, such as capital, labour and land, to produce desired goods and
services.
You can find many discussions on Georgescu-Roegens critique in the
environmental/ecological economics literature right up to the present.
Unfortunately, most economists continue to disregard the role of natural
resources in production. Check out the ideas of weak sustainability vs.
strong sustainability (though Im not a big fan of the terminology). The
former assumes a Solow/Stiglitz/Hartwick endless substitutability between
natural capital and manufactured capital via the Cobb-Douglass production
function. The latter a Georgescu-Roegen/Daly/Ayres non-substitutability
based on thermodynamic laws.
I think this is a debate that really needs to penetrate the mainstream,
especially given the current concerns of many geologists over oil. We have
to check to see if we have been too complacent with our substitutability
assumptions.
Adam McHugh
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