Revival of Keynesian Economics or Greening Capitalism: “Green Keynesianism” (original) (raw)
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Green Keynesianism: Beyond Standard Growth Paradigms
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In the wake of the global financial crisis, Keynesianism has had something of a revival. In practice, governments have turned to Keynesian policy measures to avert economic collapse. In the theoretical area, mainstream economists have started to give grudging attention to Keynesian perspectives previously dismissed in favor of New Classical theories. This theoretical and practical shift is taking place at the same time that environmental issues, in particular global climate change, are compelling attention to alternative development paths. Significant potential now exists for “Green Keynesianism ”-- combining Keynesian fiscal policies with environmental goals. But there are also tensions between the two perspectives of Keynesianism and ecological economics. Traditional Keynesianism is growth-oriented, while ecological economics stresses limits to growth. Expansionary policies needed to deal with recession may be in conflict with goals of reducing resource and energy use and carbon e...
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Advocates of environmental Keynesianism argue that investing in 'environmentally-friendly' industries is the key both to overcoming global environmental challenges and to putting the economy on a long-term footing of financial sustainability. This essay supports the analysis underlying the case for environmental Keynesianism, but criticizes its conclusions. While attractive, environmental Keynesianism contains fatal contradictions: in order for it to work economically, it implies the continuation of conventional growth in the consumer economy, which by its own terms it deems environmentally unsustainable. This flaw applies not just to the 'economic wing' of this school (who see in such investments a boost to growth) but also to its 'environmental wing' (who focus more on the avoidance of environmental costs). This does not mean that the proposed objects of environmental Keynesianism are wrong; what is wrong is to frame them as conventional economic investments. The essay concludes that environmental Keynesianism represents a failed attempt to save capitalism from its environmental contradictions; and that the perception of this failure should be the prompt to more radical thinking.
Greening economic theory: Heterodox possibilities
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As the debate about the environment has intensified, post-Keynesians, régulationists and Polanyians have been relatively silent compared to neoclassical environmental economics which is the dominant ‘policy voice’. Yet these traditions may offer insights into contemporary environmental problems and their management that could mount a challenge to the embedded character of market-based policy ‘solutions’. Collectively, these three traditions have plenty to say about growth, institutions, the role of prices and markets, events being path dependent and uncertainty. They treat time as historical, are sceptical of the positive/normative distinction, and consider economic issues to be subordinated to politics. These concepts would seem very pertinent to understanding the economic-environment interaction. Thus, their collective environment-deficit-syndrome is surprising. This paper seeks to determine the contribution these three traditions could make to environmental discourse by exploring...
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International Journal of Environment, Workplace and Employment, 2005
This paper looks at the relationship between sustainable development and economics. Neoclassical economics with its current methodological approach is not well suited to understand or analyse the problem of sustainable development. Post-Keynesian economics-with its focus on macro and policy outcomes, the role of institutions, uncertainty, historical time, and its criticism of gross substitution and ergodicity-has elements within its methodology that makes it better suited to incorporate sustainability into its analysis than neoclassical economics.
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The ‘Green Economy’ is fast becoming the new alpha and omega for many policy makers, corporations, political actors and NGO’s who want to tackle both the environmental and economic crisis at once. Or would it be better to speak about ‘green capitalism’? Going green is not only important in the fight against environmental destruction, it also makes a country “stronger, healthier, safer, more innovative, competitive and respected”, argues Thomas Friedman, the well-known New York Times columnist. “Is there anything that is more patriotic, capitalist and geostrategic than this?” Indeed, the rationale underlying the nascent project of the Green Economy is that if the market could become the instrument for tackling the environmental crisis, the fight against this crisis could be the royal road to solving the problems of the market. Focusing in particular on the Green Economy’s impact on climate change, this paper analyses the Green Economy as a hegemonic project that tries to retranslate environmental concerns into a new jargon, and to turn environmental conflict into a new motor for economic development.
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The paper starts with a brief criticism of macroeconomic analyses of different schools of thought for their focus on economic growth and maximisation of output. This applies to the traditional Keynesian approach, which has focused on the achievement of sufficient aggregate demand to underpin full employment and full capacity utilisation, down-playing aggregate supply constraints. This also applies to the neoclassical approach, including the current New Consensus Macroeconomics approach, which asserts the dominant role of aggregate supply in the long run, and where growth is set by the so-called 'natural rate of growth', with no concerns over environmental and ecological issues. The paper then proposes a different approach to macroeconomic analysis. It explicitly acknowledges that economic growth is a double-edged sword. Growth can help to alleviate persistent levels of high unemployment, but it can also lead to potentially catastrophic environmental problems. Building on the Monetary Circuit theory and the Demand-led growth theory, the paper offers an analysis of the interconnections and interdependence of the economic, biophysical and social worlds and by doing it hopes to provide the building blocks for the establishment of post-Keynesian ecological macroeconomics.
Keynes and sustainable development
International Journal of Political Economy, 2009
Since the beginning of the 1970s, questions related to ecology have reached the forefront of policy discourse and progressively led to the adoption of the concept of sustainable development, which now appears to be a new worldwide objective. We argue that numerous writings of Keynes contain the premises of such a sustainable development. Indeed, Keynes's positions on uncertainty, money, the place of economics, arts, philosophy, etc. are consistent with a strong sustainability based approach. Finally, we try to offer some insights for an indispensable twenty-first-century post Keynesian sustainable development program.