Friday, June 6, 2008

Book Review: Ecological Economics

Ecological Economics: Principles and Applications by Herman E. Daly and Joshua Farley

Book Description: This is the definitive entry-level textbook for ecological economics, co-written by one of the leaders in the field, Herman Daly. This is a must read for anyone who is interested in the nexus between economics and the environment. Unlike neoclassical economics, ecological economics starts with the premise that the human economy exists in a finite world with limited resources and limited sinks.

There is a lot more to the field of ecological economics than can every be explained in one tiny blog post. I had the wonderful opportunity to take a class with Herman Daly. His ideas will one day revolutionize the entire economics field, I believe. Ecological economics is first and foremost an interdisciplinary field, taking not just economics, but sociology, policy, philosophy, and biology, to create something that is realistic and makes sense.

Daly and Farley critique neoclassical economics, the economic theory that is most taught today. They argue that economics should follow basic physical laws like the law of thermodynamics, and that an economic system should be both equitable and efficient, and that efficiency should take into account social values.

A basic knowledge of economic theory is necessary to fully understand some of the book's concepts, but the majority of it can be read by the layman, in my opinion. Give it a try -- you might find you like it. This is economics as it should be.