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AGRICULTURAL RESTRUCTURING
IN
SOUTHERN AFRICA
Papers presented at an
International Symposium
held at Swakopmund, Namibia
24-27 July, 1990
Edited by
Csaba Csaki
Theodor Dams
Diethelm Metzger
Johan van Zyl
International Association of Agricultural Economists
in association with
Association of Agricultural Economists in Namibia
(AGRECONA)
First published in 1992 by the Association of Agricultural Economists of
Namibia
P.O. Box 21554, Windhoek, Namibia.
©
International Association of Agricultural Economists.
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part may be reproduced by any process without written permission. Enquiries
should be made to the publisher.
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P.O. Box 1707, Windhoek, Namibia.
Distributed by the Association of Agricultural Economists of Namibia,
P.O. Box 21554, Windhoek, Namibia.
ISBN 99916/30/10/4
40
NEOCLASSICAL AND INSTITUTIONAL APPROACHES TO
AGRICULTURE, ENVIRONMENT AND DEVELOPMENT
P Soderbaum
Environmental problems represent a challenge to all countries. It is not only people in
industrial countries like Sweden, Japan or the USA that have to reconsider their views of
development or progress, but also people in developing countries, for instance in Africa,
where important actors often take over the ideals of industrial nations. Assuming that
sustainability or eco-development is a goal, it may well be that these countries have as much
or more to learn from their indigenous traditions.
Much of the debate on environmental and development policy in the industrialised
world tends to emphasise incentive systems and technology as the main instruments in
coming to grips with environmental problems (cf. Aniansson & Svedin, 1990). Changes in
tax systems, environmental levies and other forms of regulation can certainly be useful, as
can technical research and the utilisation of existing environmental or other technology. But
as I see it, environmental problems also have to be approached at a more fundamental level.
More precisely, they have to be dealt with at the level of paradigms or conceptual and
theoretical perspectives. Related to this is the issue of the development views of individuals
in different roles, of ideas of rationality, economics and efficiency, views of societal change,
etc.
Mainstream economics of the neoclassical kind was not primarily developed to deal
with environmental problems. When facing a new category of problems, it therefore seems
reasonable also to consider alternatives to the neoclassical paradigm. In so far as we are
willing to consider alternative perspectives in this sense, it may well be that we will throw
some light on the more detailed issues of technology, incentive systems, approaches to
decision-making and accounting.
THE NATURE OF ENVIRONMENTAL PROBLEMS
Whether one school is more fruitful than another is largely a matter of the problems
that are faced. Here I will emphasise environmental and natural resource problems, although
much of the argument is hopefully also relevant to problems of a social or sociocultural kind.
There are some features of environmental problems which do not fit in well with
neoclassical economics. I am thinking, first, of the inertia and often irreversibility of
environmental impacts. It may be very difficult to return to the original position once a nonrenewable resource, such as a fish population, has been excessively exploited or when
acidification or pollution of soil and water has occurred. The idea of trading all impacts
against each other in one-dimensional, monetary terms (e.g. monetary costs of construction
against losses in scenery or ecosytem degradation) to establish some net impact in terms of
present values no longer seems reasonable, in so far as we take irreversibility seriously.
Second, environmental problems generally have an ethical or ideological component
which cannot be handled satisfactorily within the scope of the neoclassical approach. We all
know that those who argue or sometimes even fight for the environmental cause do not hold
the same values as their opponents. The suggestion that these problems can or should be
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Neoclassical and institutional approaches to agriculture
"solved" by using the so-called "correct" market prices of conventional cost-benefit analysis
is not taken seriously by an environmentalist. This is particularly true of environmentalists
who understand that these "correct" values are based on a specific market ideology, more
precisely a modified version of the GNP growth ideology. For instance, what is the correct
monetary cost of the extinction of a given plant species? And if this question can be
answered, why those prices? What about other kinds of market ethics or ideologies? And
why limit the analysis of values to monetary values and exclude ethics and ideology in a
broader sense?
So, environmental problems not only exist "out there in the field". Human beings are
also involved, e.g. our knowledge, values, ideologies, thinking habits and behaviour in
different roles. In addition, of course, our social relations, modes of production and
consumption, infrastructure and institutional arrangements are important. These factors can
either contribute to improving the environment or to environmental degradation. To the
extent that our thinking habits and values are related to economics as a discipline, a readiness
to reconsider economics itself is required.
SCHOOLS OF mOUGHT IN ECONOMICS
Classifications of schools of thought in economics are always open to debate. I will
refer to three broad categories, i.e. Marxist economics, institutional economics and
neoclassical or mainstream economics. The mainstream may be further divided into
Keynesians or others who believe in some degree of government intervention as a necessity
in a market economy, and those who downplay the role of government and believe firmly
in the potential of the market to solve all kinds of problems, environmental problems
included. The latter group of market enthusiasts are referred to as Austrians (cf. Kirzner,
1989).
Institutional economists are organised in the US-based Association for Evolutionary
Economics and the more recent European Association for Evolutionary Political Economy.
One may speak of a European tradition of institutional economics relating back to the
German historical school. In Sweden, institutional economics has had an important
spokesman in Gunnar Myrdal, Nobel prizewinner in economics. The Swiss economist, K.
William Kapp, who may be regarded as the first modem environmental economist ( cf.
Kapp, .1950; 1970; 1976), is another scholar who saw himself as an institutionalist.
There are many relatives of institutional economics. Amitai Etzioni's Society for the
Advancement of Socio-Economics is one example. This group approaches economics from
an interdisciplinary point of view and stresses the need for an analysis of the ethical
foundations of economics (Etzioni, 1988). Other groups speak of social economics (cf.
Review of Social Economy), humanistic economics (cf. The Human Economy Newsletter)
and interdisciplinary economics (cf. Journal of Interdisciplinary Economics). There are also
journals and networks dealing explicitly with environmental issues in relation to economics,
such as Ecological Economics, i.e. the Journal of the International Society for Ecological
Economics, and the New Economics Foundation with the Living Economy Network.
HOLISTIC AND EVOLUTIONARY ECONOMICS
Differences between present-day neoclassical and present-day institutional economists
cannot be described in terms of black and white. Rather, we have to do with divergent
tendencies. My interpretation of such tendencies starts with a reference to the Finnish
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philosopher Georg Henrik von Wright. Von Wright argues (1986) that there is generally a
tension within science between reductionist-mechanistic modes of thinking on the one hand
and holistic-evolutionary tendencies on the other. Reductionist and mechanistic approaches
have dominated physics, chemistry and biology since Newton and have succeeded in some
respects. Considering especially the environmental problems now facing mankind, Von
Wright calls for an increased emphasis on holistic and evolutionary approaches.
Similar tensions exist within economics. Neoclassical economics is largely on the
reductionist-mechanistic side, while institutional economics is more holistic and evolutionary.
Extreme beliefs in specialisation and division of labour within science, between policy areas
and generally in society can be given as an example of the reductionist tendency of
neoclassical economics. Thus the neoclassical economist tends to believe in very clear
boundaries between economics and other disciplines and in the possibility of giving useful
advice on the basis of highly specialised knowledge. Environmental economics and
environmental policy are largely seen as areas that can be meaningfully detached from other
study areas in economics and other policy areas. In this way, environmental economists are
expected to take care of environmental problems and suggest a rational environmental policy,
while other economists need not bother and can continue to do what they did before in fields
such as agricultural and food economics, transportation economics, international economics,
business economics, public finance, etc.
Institutional economists, on the other hand, emphasise a holistic or inclusionist (as
opposed to exclusionist - cf. Pirages, 1989) approach to economics and policy-making.
Specialisation and division of labour are seen not only as a positive possibility, but also as
a danger. The relationship between disciplines, for instance social sciences, is one of overlap
rather than one involving clear boundaries. Every scholar should try to attain a balance
between specialised knowledge and knowledge at a holistic and more interdisciplinary level.
A scholar who gives advice to politicians or other actors on the basis of specialised
knowledge, while missing the holistic or generalist side of knowledge, may be a dangerous
person from society's point of view.
According to the holistic view, scholars in all disciplines should consider how
environmental and natural resource concerns impinge on their subjects. Thinking in
environmental terms has to permeate all subfields and all policy areas of economics.
Environmental policy overlaps with transportation policy, energy policy, food policy, etc.
and policy discussion has to include or even start with visions of society that comprise all the
so-called sectors of the economy.
Another case of neoclassical reductionism concerns the idea of economics that is
advocated for purposes of practical economic analysis. Neoclassical economists, too, may
realize that the world is complex, but they feel that far-reaching simplification is necessary.
Practical economic analysis is reduced to monetary analysis. Cost-benefit analysis, for
instance, can be seen as a case of monetary reductionism. Here the institutional economist
suggests a more holistic and disaggregated view of economics (see below).
Equilibrium theory has been mentioned as an example of the mechanistic tendencies of
neoclassical economics. Institutional economists in turn have a preference for evolutionary
thinking. "Patterns modelling" (Wilber & Harrison, 1978) is a characterisation of this interest
in how technology, institutions, habits, values and the economy at large evolve through time
(cf. Norgaard, 1985). Where neoclassical economists use models that are closed in a
mathematical sense, institutionalists prefer models which in the same sense are open-ended
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or only partially closed (Myrdal, 1978). For instance, knowledge about environmental
impacts is often fragmentary rather than complete, but together the different fragments may
represent meaningful patterns. Attempts to bring everything together in simple equations or
in one-dimensional terms may convey a false feeling of control.
IMPORTANCE OF INSTITUTIONAL ARRANGEMENTS
Institutional economics focuses on actors, their world views, habits, etc. and on
institutional arrangements. The latter term refers to organisation, rules of the game, power
relationships, entitlements and other control over resources. Where neoclassical economists
tend to take institutions for granted Gust as technology is often regarded as exogenous),
institutionalists are ready to question current institutional arrangements (Bromley, 1989).
Consider the case of nuclear power. It can be argued that no nuclear reactors would have
been in operation in Sweden or the US with rules of the game that made each company
strictly liable for every possible kind of accident, radioactive pollution, etc. In other words,
"the polluter pays"-principle is not taken seriously today. Some agreement on limited
liability effectively limits the monetary costs and risks of utility companies, as is shown by
the fact that a number of countries in Western Europe have no claims on the Soviet Union
for the damage caused by the Chemobyl accident.
In fact, all commodity prices on national and international markets are somehow
contingent upon the prevalent institutional structure. And depending upon a valuational
standpoint, a specific institutional structure may be regarded as reasonable or not. The
historical explanation for present rules may be one of monopoly power or cartels, including
Big Government and/or Big Business. With a different institutional structure things would
look different, as would analyses in terms of costs and benefits.
THE BENEFICIAL OR DESTRUCTIVE FUNCTIONING OF MARKETS
Markets described in terms of supply and demand are at the centre of neoclassical
analysis. Institutional economists suggest a broader approach, according to which all kinds
of rules in society are potentially relevant and markets represent an important but special
case. Institutionalists regard the market as a useful decentralising mechanism in society, but
they do not share the unreserved enthusiasm for the market as a problem-solver found, for
instance, among Austrians. Depending upon a valuational standpoint, actual rules
characterising the specific market under consideration and the behaviour and values of actors
in the market place, a specific market may be evaluated as beneficial or destructive by a
specific person.
Assuming that it is important to protect the environment, consumers who share such
values can contribute by buying products that are less detrimental to the environment (e.g.
by using paper not bleached with chlorine). Entrepreneurs can take account of the
environment in their business concepts as a way of increasing sales and/or for reasons of
social responsibility.
But there are also many examples of how consumers and businessmen have ignored
environmental impacts. Assuming that catalytic converters are good for the environment,
Volvo and other European car manufacturers consciously delayed the introduction of this
technology in Europe. Concern for fellow car manufacturers seems to have been more
important to Volvo at the time than concern for the environment. Sometimes I feel that
private cartels represent a kind of private command economy sharing some of the
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Soderbaum
characteristics of the state-controlled command economies that are now so severely criticised.
THE COLOURING OF RESEARCH BY VALVES AND IDEOLOGY
Concerning epistemology, neoclassical economists remain innocent positivists, in spite
of proposals for a more open attitude by philosophers of science (e.g. Caldwell, 1982). They
tend to believe in value-neutrality and objectivity and regard their arguments as "scientific".
Subjectivity is bad and should be minimised or withheld. Institutional economists regard
value-neutrality, for instance in connection with environmental policy, as an illusion. "Values
are always with us" in all stages of our research, as Gunnar Myrdal has repeatedly argued
(1973; 1978). Some problems rather than others are chosen for study. There is often a
choice of perspective or methodological approach. A given approach may be applied in more
than one way. Choices of this kind are always made on the basis of beliefs and values. In
these and other ways, subjective elements enter into the research process.
According to Myrdal, scholars should try to increase their consciousness of values and
be explicit about the valuational basis of particular studies. I would like to add that in some
kinds of studies, an attempt should be made to be many-sided with respect to valuational,
ethical or ideological standpoints. In addition, the scholar could very well try to contribute
to the articulation of various ideologies in society, for instance environmental ideologies.
Concerning environmental issues, it has already been argued that conflicts between
interests and interested parties are the normal state of affairs. In such situations the scholar
can contribute meaningfully by trying to interpret the ideas of progress or development of
the opposing parties. Hermeneutics then becomes an interesting epistemological option
(Helenius, 1990). What are the values of those who are for or against a particular
exploitation project?
I am even ready to argue that subjectivity can be an asset for the student of
environmental problems. Those who favour an unemotional distance to their area of study
will never understand environmentalists and easily become defenders of the status quo. It
may be that scholars who are committed to the environment will better understand
environmental problems than those who limit their commitment to a specific kind of
economic theory or method. No healthy person is uncommitted in every respect. Accepting
a positive role for commitment, subjectivity and hermeneutics means that the set of scientific
performance indicators changes somewhat as compared with the ideals of positivism.
A HOLISTIC VIEW OF ECONOMICS
The history of exploitation of natural resources and other environmental deterioration
indicates that something is wrong with the objectives, approaches to decision-making and
accounting practices which have been developed by mainstream economists and which our
societies have relied upon. A reliance on monetary control instruments does not seem
sufficient in view of the many failures that have occurred and the difficulties ahead of us.
The pilot needs more than one kind of instrument to manage his aircraft - something similar
may hold for business leaders, politicians, bureaucrats and indeed anyone who cares about
the environment.
Attempts to modify GNP by adding something that is judged valuable and subtracting
components which are judged environmentally harmful may improve things somewhat, but
it will not take us out of the main dogma of monetary thinking. For this reason, recent
proposals in Sweden to estimate a "green GNP" which allows for environmental impacts, or
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to put monetary price tags on environmental impacts, are not sufficient and may in fact
postpone a necessary transformation of thinking habits in relation to economics. So it seems
as if the idea that all factors or impacts can meaningfully be reduced to some monetary
equivalent has to be replaced by a strategy of disaggregation, whereby monetary and nonmonetary impacts are kept separate.
According to this disaggregated, and in a sense more holistic, idea of economics, nonmonetary impacts, e.g. changes in the state or "position" of natural resources, are as
"economic" as monetary impacts (Soderbaum, 1986; 1987). A distinction can then be made
between four categories of economic impact (Figure 1).
In addition to the previous distinction between monetary and non-monetary impacts, a
distinction is made in Figure 1 between impacts that relate to periods of time (flows) and
those that refer to points in time (positions or states). The term "position" is preferred to
"stock" because the word stock tends to be interpreted narrowly as stored entities of a
homogeneous kind. Position refers not only to the quantitative but also to the qualitative state
or status of various objects of description.
Monetary
Non-monetary
Flow (referring to periods
of time)
Positions (referring to
points in time)
I
II
III
IV
Figure 1: Four categories of economic impact
Category I is exemplified by GNP, which is expressed in monetary terms for a year,
i.e. a specific period of time. A monetary position is exemplified by the assets or debts of
a firm at a particular point in time (cf. category II). The input of mercury from a pulp
factory to a nearby lake exemplifies a non-monetary flow (category III), whereas parts per
million (ppm) of mercury found in fish of a particular kind at a particular place exemplifies
a non-monetary position (category IV).
Considering that much economic analysis has been an analysis in monetary terms and
especially of monetary flows, it seems vital to point to the importance of keeping an eye on
non-monetary impacts, especially non-monetary positions. A specified reduction in mercury
discharges into a nearby lake, e.g. from 300 kg per year to 200 kg per year, is an
improvement in the sense that 200 kg is less than 300 kg, but 200 kg annually may still lead
to further deterioration in positional terms, i.e. a higher level of mercury in fish. If the
objective is to reduce the level of mercury in fish in ppm terms, a more radical reduction in
discharges may be needed, e.g. from 300 to 30 kg.
Kenneth Boulding, in his classic article "The Economics of the Coming Spaceship
Earth" (1966), argues strongly that stocks (or non-monetary positions in my vocabulary) are
important in economic analysis. According to his judgement, economists "have been
obsessed with income-flow concepts to the exclusion, almost, of capital stock concepts".
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mE DECISION-MAKING ACT IN HOLISTIC TERMS
One example among others of an "obsession with income flow concepts" is cost-benefit
analysis of the conventional kind. But what are the alternatives? The previous discussion
points in the direction of disaggregated approaches rather than aggregated ones. Impacts of
different kinds should be kept separate; impacts related to different interests or interested
parties should be kept separate, as should impacts referring to different periods or points in
time.
Examples of highly disaggregated approaches are given by some systems and policy
analyses, positional analyses (SOderbaum, 1987; 1990), and environmental impact statements,
although the latter approach may be limited in scope to a specific category of impacts. I will
not here go into detail concerning these approaches. Positional analysis will be commented
on only in one respect, and that is, the view which it takes of the decision-making act and
rationality.
There are probably many styles of decision-making rather than one, and our ideas of
rational decisions are partly the result of social influence. In economics the idea of rationality
is connected with optimal "solutions" based on calculations in monetary or other terms. Some
variable is maximised or minimised, whereas other variables may appear as boundary
conditions or restrictions.
In some simple cases of decision-making, where few impacts, decision-makers and
people are affected and considerable consensus about values exists, the idea of optimal values
using computer programs to pick out the best alternative seems useful. In more complex
cases of decision-making some other idea of rationality is called for. In holistic or Gestalt
terms, decisions can be thought of as a matching procedure between the impact profiles of
individual alternatives and the value profiles or ideologies of individual politicians and other
decision-makers.
Here the analyst tries to identify the pattern of impacts arising from the choice of each
alternative and relate them to possible ideological patterns. From the point of view of a
decision-maker, there may be a good fit between his or her values and some specific
alternative, or a bad fit. This idea of matching and pattern recognition replaces the onedimensional comparisons of present values supported by the conventional view. While
pictures of a building, bridge or road are more or less irrelevant as an element in
conventional cost-benefit analysis, a picture may be very relevant as part of an attempt to
describe impacts holistically or in terms of patterns.
Consider a case of complex decisions in private life, such as the choice between two
different jobs or places and houses to live in. How do we go about making these decisions?
How many of us feel that we are more rational in this situation if we include everything in
a monetary or other one-dimensional calculation? How many of us think mainly in terms of
patterns and limit the role of conventional calculation to estimates of the monetary costs of
each house and place?
It is sometimes argued that psychologists have shown that individuals can only deal
cognitively with seven pieces of information at a time and that one-dimensional comparison
is therefore the only realistic way to proceed. My answer is twofold. Simplification always
has a price. To the extent that our societies face <;omplex decisions in the environmental and
other areas, overlooking this complexity may not be the best strategy. Second, when it comes
to structures and patterns that have meaning to individuals, the restriction to seven pieces of
information is no longer valid. I can recognize a friend in the street and my image of his face
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and person is not limited to seven pieces of information. Similarly, the art of reading is an
example of what human beings can achieve in terms of identifying and recognizing patterns.
It should be noted here that the meaning of "value" has been broadened when compared
with "monetary value" as in cost-benefit analysis. One-dimensional evaluation, i.e.
distinctions between good and bad (or degree of goodness or badness) can take place also in
non-monetary dimensions, e.g. concerning the pH level of a specific lake. As has been
indicated, there is also a possibility of multi-dimensional evaluation in terms of patterns or
profiles. Various standpoints expressed in terms of ethics or ideology, for instance a specific
version of ecological ethics, can be used to evaluate transportation projects, energy projects,
etc.
SUSTAINABILITY OR ECOLOGICAL EmiCS
Neoclassical economics tends to support and legitimise a view of progress in society
which is limited to the traditional indicators of GNP growth, balance of payments,
employment, indices of inflation, etc. But the debate about environmental, transportation,
energy or food policy suggests that this conceptual framework is insufficient and that analysis
that is limited to such indicators is dangerous to society. A number of catchwords have been
used to suggest a new direction for societal development. Early in the 1970s, "qualitative
growth" was suggested, to focus on the fact that some growth may be negative and
cancerous, while growth of other commodities may be mainly beneficial (cf. Leipert, 1983).
A second catchword is "eco-development", meaning ecological development which
focuses on impacts upon ecosystems and the natural resource base of future generations. Selfreliance rather than unhampered international trade is suggested as a strategy leading to an
improved environmental performance at the local and regional levels (Sachs, 1976; 1984;
Colby, 1990). I have myself suggested some "ecological imperatives for public policy"
(1980; 1982; 1986), i.e. a specific idea of environmental ethics. Other attempts to formulate
an environmental ethic have been made by Goodland & Ledec (1987) and a Swedish
governmental study (Ministry of Agriculture, 1983). In Eastern European countries the term
"ecologisation" has been used, e.g. ecologising the economy, ecologising industry,
ecologising agriculture.
Lester Brown is among the early users of the sustainability concept, e.g. sustainable
production, a sustainable society (1981). Since the Brundtland report (World Commission,
1987), this term seems to be dominating the scene. One attractive (or dubious) feature of the
term is that each scholar or other actor can choose a meaning of sustainability which fits well
into his or her pre-established world view. Growth enthusiasts can speak of sustainable
development in the sense of sustainable growth. Neoclassical economists can choose a
monetary interpretation of sustainability to make it fit as easily as possible into the dominant
paradigm.
In my own case I tend to return to the eco-development concept or to the
abovementioned "ecological imperatives", arguing that this particular environmental ethic is
reasonably operational, i.e. useful in testing the "sustainability" of a particular course of
action or a particular ongoing activity. The focus is on the non-monetary position (or state)
of the environment at specific future points in time. For instance, will a specific development
trend lead to the degradation or the improvement in the state of the environment? A set of
principles for housekeeping may be formulated in the following terms for decision situations
concerning energy projects, transportation projects, forestry projects, etc. in a given region:
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Soderbaum
- Alternatives which involve irreversible degradation of the natural resource base within the
region should be avoided.
- Alternatives which involve irreversible degradation in the natural resource base in other
regions and globally should be avoided.
- In situations where there is uncertainty and knowledge is incomplete with respect to
possible irreversible negative impacts on the future natural resource base (for instance a
small probability of catastrophic consequences), a philosophy of cautiousness should be
chosen.
- Wherever possible, alternatives with a positive or neutral impact on the future natural
resource base should be chosen. If no such alternative is available, a search should be
initiated to find new alternatives in terms of a different technology, formulate new rules
of the game, reconsider lifestyles at individual level, etc.
The imperatives suggested may be further elaborated into behavioural rules of thumb
concerning non-renewable resources, renewable resources, toxic materials with different
characteristics, etc. The burning of non-renewables such as fossil fuels, for instance, should
not take place. Any activity based on such energy resources is clearly unsustainable
according to the above definition.
Some activities are technically difficult or financially very costly to reverse, rather than
irreversible. Should these activities also be avoided? Where should the line be drawn between
activities that should be avoided and those that can be accepted? This example indicates that
some difficulties still remain for the judgement of decision-makers or others concerned.
The imperatives are deliberately limited to environmental impacts and therefore do not
represent a COIIlplete ideological standpoint in relation to development. Social, cultural and
monetary factors or impacts often form part of ideological reasoning. These factors become
important when the choice has to be made among alternatives that remain as acceptable after
the three principles mentioned above have been considered.
It should be observed that the kind of ethic suggested is essentially anthropocentric and
emphasises three categories of social relations. One is between those living now in a specific
region (A), the "we-category" for collective decision-making, and future generations that will
occupy the same region A. A second is between the present generation living in region A
and present generations in regions other than A. Finally, relations between the present
generation in A and future generations in regions other than A are considered.
Specific activities (and all activities) in a specific region such as Uppsala or Sweden can
be scrutinised in relation to the above formulation of an ecological ethic. In the energy sector
neither nuclear power nor fossil fuels qualify as sustainable. Wind power and bio-energy
have a better chance. All kinds of transportation based on fossil fuels, such as cars and
aircraft, are unsustainable. Conventional agriculture influences the future natural resource
base negatively in more than one way. Non-renewable resources are being used and pollution
of water systems or changes in the soil structure may be difficult to reverse. So-called
organic or alternative agriculture is an improvement, but even in this case something remains
to be done, e.g. tractors should be powered by bio-energy rather than fossil fuels to qualify
as sustainable.
It may also be possible to say something in general about all the activities, industrial,
agricultural, tourism-related, etc. of the people in a specific region. As examples we may
pick out countries that perform well according to traditional GNP indicators, for instance
Japan. Is this country currently degrading the natural resource base of its own territory
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and/or contributing to degradation outside its own territory (cf. imports of timber from
tropical forests)? Countries like Sweden or the USA, although currently less successful in
terms of GNP, should be scrutinised in a similar manner. Is the lifestyle of the average
Swedish, US or EC citizen a sustainable one?
Assuming now that there is some willingness among citizens and various actors to go
from present unsustainable practices to more sustainable ones - how can this be done? What
is the best strategy? One way of proceeding is represented by the Brundtland report. The
strategy is one of economic growth (nationally and in private business) and unrestrained
internationalisation. Growth means more financial resources available to meet all kinds of
needs, including environmental protection and education. According to this view, free trade
will solve all problems, and environmental problems are no exception.
While Social Democrats, Conservatives and Liberals in Sweden all seem to support
such a strategy of growth and unrestrained internationalisation, there are at least two parties
which are more sceptical. I am thinking of the Green Party and the Centre Party. Members
of these two parties have an Ecological Europe as their vision, rather than the Growth
Europe of the original Treaty of Rome, and they believe that a strategy of self-reliance will
do better than one of unrestrained internationalisation. Internationalisation may be important
in some sectors, such as those relating to information, communications, cultural exchange
and knowledge, but for physical commodities and strategic commodities such as food,
selective internationalisation seems preferable. Close contact between consumers and
producers is believed to be important, and instead of the "big is beautiful" idea of the growth
strategy it is argued, with Schumacher, that "small is beautiful".
Personally, I believe that the second strategy is more compatible with the environmental
ethics suggested. Each region or country should bear a direct responsibility for the kind of
environmental deterioration caused by the lifestyle of and the commodities used by its
inhabitants. Wherever reasonable, possible environmental impacts should be "internalised",
i.e. confined to the region (cf. the second ecological imperative). Unhampered growth of
business companies, accompanied by reduced power to control development through
parliaments and nation states, may, as previously argued, lead us to a new kind of command
economy in the form of multinational enterprises or cartels of multinationals. In addition,
homogenisation of the commodity supply internationally can be seen as a threat to cultural
diversity. The world will be a much less interesting place.
DEVEWPMENT OPTIONS FOR SOUTHERN AFRICA
Figure 2 is an attempt to indicate some options for agricultural and rural development
in Third World countries (Soderbaum, 1987). The conventional idea of development is
indicated to the left, while a self-reliance, eco-development philosophy (incorporating
traditional as well as newer elements) is shown to the right. A suggestion that these two ideas
of development and progress are of interest does not, of course, exclude the possibility of
others. Various kinds of compromises or cross-fertilisation can also be considered.
Let us now reflect on the role of economic theory in relation to the two philosophies.
It becomes clear how closely related the first philosophy is to mainstream neoclassical
economic theory. The belief that specialisation is a road to prosperity goes back to Adam
Smith's "Wealth of Nations", published in 1776. Smith mainly discussed manufacturing
processes, but it is very likely that the same kind of thinking in efficiency terms has
influenced the subdivision of governments into sectors, each with limited responsibilities.
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There are, of course, still reasons to believe that, in many cases, specialisation reduces
average monetary costs of production and improves administrative processes, but any
specialisation has to be integrated into a holistic view of development and responsibilities.
*
Integration in the national and world
economy
Local and national self-reliance and ecodevelopment
Maximum contribution to GNP growth
and foreign exchange earnings
* Reduced dependence on the national and
* Poverty and equality regarded as a
international economies. Reduced
vulnerability to external disturbances
* Poverty and equality as multi-dimen-
matter of monetary income
* Culture and environment are secondary
sional concepts
* Non-monetary aspects, such as
considerations
* "Westemisation" with respect to
compatibility with eco-development and
with local (national) culture are
essential
*
institutions, e.g. expansion of cash
economy, wage labour and "market
democracy"
* Large-scale, high technology
Gradual institutional change, e.g. nocash transactions (barter, informal, etc.)
also regarded as important. Emphasis
on meaningful work and participatory
democracy
* Small-scale, "appropriate technology"
agriculture, i.e. high-input chemical
agriculture based on non-renewable
resources, seed supplied by
multinational firms etc.
agriculture, e.g. ecological agriculture
(organic farming based on renewable
resources and seed from indigenous
species)
Figure 2: Two philosophies for rural and agricultural development
International trade theory was originally formulated by another classical economist,
David Ricardo. Again this theory cannot be dismissed easily, but it is simplistic and
reductionist in its way of dealing with the interests of the countries that are trading. Certainly
more than one interest is involved in each of the trading countries. The impacts of trade are
multi-dimensional rather than one-dimensional. Non-monetary impacts relating to the energy
used in transportation or environmental impacts connected with production, transportation,
consumption of commodities and waste disposal should certainly be considered as part of any
approach that claims to be holistic. Neglect of many dimensions and interests, such as the
ones mentioned, indicates that neoclassical international trade theory is as much ideology as
it is theory. (For a discussion of biological diversity in relation to the global exchange
economy, see Norgaard, 1987.)
While a normally indoctrinated, mainstream economist will accept most of the elements
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Neoclassical and institutional approaches to agriculture
of the first philosophy, he will probably have difficulties with the development philosophy.
Concepts such as culture, self-reliance, vulnerability, informal economy, meaningful work,
appropriate technology, eco-development or ecological ethics become either meaningless or
irrelevant when viewed through neoclassical spectacles.
And yet, an increasing proportion of the citizens of Western countries and establishment
groups have gradually turned to a belief that it is the second, self-reliance, eco-development
philosophy which is the most realistic, assuming that human survival on this planet is
regarded as important. Eco-development in one form or another is then seen as the best
choice, while exclusive reliance on monetary performance indicators is judged to be
dangerous to society.
Returning now to Third World countries, it is a fact that most economists with the
International Monetary Fund or the World Bank tend to regard the debt crisis as the biggest
problem facing these countries. (Concerning the World Bank, there are important exceptions.
The writings of Goodland (1985), Daly & Cobb (1989), Bromley (1989) and Colby (1990)
may mark the beginning of a new way of thinking in relation to environmental and
development issues.) I do not want to downplay the importance of the issues of monetary
debt and imbalance in trade relations. But I would like to remind IMP and World Bank
economists that there is also a debt to future generations in non-monetary terms. Human
survival is at stake at a regional level and problems are also being discussed globally.
Recalling the irreversible character of many environmental problems, it can be argued that
the non-monetary debt crisis is a small problem when compared with the monetary debt
issue.
Against this background, some modesty is called for concerning the "neoclassical" idea
of progress in GNP terms. With institutional spectacles, the eco-development philosophy
becomes understandable and reasonable. Imposing only one development idea on the public
and various actors in the political scene is clearly a political act. To be versatile and openminded with respect to ideologies and development concepts seems preferable.
THE CASE OF NAMIBIA
The above analysis can be applied to all areas of environmental and natural resource
management in Namibia or other African countries. For instance, any degradation of the very
rich marine life along the Namibian coast should be avoided. This is a case of management
of common property resources (Bromley & Cernea, 1989). For efficient protection of such
resources, rules based on the ecological ethics here indicated are necessary. Some yearly
harvest is possible, but a precautionary principle seems called for.
Another issue in Namibia is the use of arid areas for the dumping of atomic waste from
Europe and the USA. Here the main responsibility lies with the exporting countries which
in this way are trying to evade degradation of their own territories. Returning to our
ecological ethics, it is clear that the exporting countries have to find other "solutions" to their
waste disposal problems, or else avoid activities that produce radio-active waste.
Where agriculture is concerned, the option of organic, ecological or alternative
agriculture should be carefully considered. Since the 1960s industrialised countries like
Sweden have concentrated on increased productivity in simplistic terms (harvest per hectare,
milk per cow, etc.), together with monetary indicators like income or profits for the farmer.
Many farmers and scholars now realize that such simple performance indicators may hide
essential aspects of reality. The flora and fauna have suffered and water systems have been
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polluted. Some signs of an interest in modem forms of organic farming can now be seen and
the Swedish and Danish governments have financially supported a shift towards organic
farming.
In 1988, 10 000 hectares of arable land in Sweden were used for organic agriculture.
Today, in 1990, 40 000 hectares are cultivated organically. This, however, is only just over
one percent of the total arable land in the country. So, we have a long way to go if our goal
is ecological agriculture. It can be added that some 20 extension specialists are now involved
in facilitating a changeover to organic farming and in improving this kind of agriculture.
I imagine that the situation is rather different in Namibia and that the country "scores"
much better than Sweden or Denmark with respect to organic farming as a share of total
acreage. It can be noted that IFOAM, the International Federation of Organic Agricultural
Movements, recently held its international conference in an African country, Burkina Faso.
At that conference, the agriculture minister of Burkina Faso argued that organic farming
would continue to be the rule for the majority of farmers in his country and that organic
farming played a major role in the country's agricultural policy. The Republic of Tanzania
has also shown an interest in organic farming and organised conferences with USAID and
Rodale Inc.
CONCLUDING COMMENTS
As already indicated, there are tensions mainly among neoclassical writers, and some
are rather close to the views set out here (cf. Sen, 1987). Also in relation to environmental
and natural resource problems, neoclassical theory has something to offer, and my main
attitude in relation to these paradigm questions is one of pluralism (Norgaard, 1989). As
scholars, we should be open-minded in relation to developments and perspectives outside
science itself (Feyerabend, 1978), in relation to other disciplines and in relation to other
schools of thought within our own discipline. Economists who, in theory, claim to be aware
of the positive role of competition should not themselves build cartels to exclude unorthodox
or non-establishment views. I hope that this need for pluralism will be observed at Namibian
universities and that Namibian scholars will participate in and establish a constructive
dialogue nationally and internationally about scientific and public policy issues.
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