Pending puzzles and barriers to be solved in Substantive Economics

A central scientific motivation of my thesis has been to contribute to a much needed Substantive Economics, where the conceptualization and accounting of labour and natural resources becomes de-commodified. The current scientific knowledge on the causes and consequences of the ongoing ecological crisis clearly indicates that a paradigm shift is necessary.

The Strong Sustainability Science owes its birth to this recognition.

Chapter 8. Conclusions

My thesis has been focused on the long-term change of biophysical patterns and agroecological processes of farm systems taken as an object of analysis. However, I have often faced the limits that relate them to other areas of the economy. The impact of mechanization in extractive activities, the relationship of agriculture with water metabolism, the role of forests in energy metabolism, are examples of the intersectionality among different study areas of the economic matrix of any current society. It has been sometimes difficult, especially in the study of industrial societies, to establish the theoretical limits and spatial boundaries of the analysis. Any economic proposal that wants to succeed, in the holistic sense of the word, must be aware of this intersectionality. Yet proposals on limited dimensions and scales are also needed, so as to confront them with these set of broader interactions in a process of ascending scientific construction.

In this last section I would like to underline the theoretical contributions made to the conceptual framework of Ecological Economics, and in particular to the Social Metabolism of agriculture. I divide them into two closely related aspects: what we understand as structuring-information in the agroecosystems; and how we can move forward in the search for innovative political proposals to overcome current unsustainable trends.

As explained, there are no agroecosystems without human intentions behind. The work incorporated into them, as in any other productive process, always responds to a specific objective. Goals are often not decided collectively, even though they may be. We consider that this intentionality is what ends up structuring the agroecosystem. However, in order for agricultural systems to be truly sustainable, the structure of their network of energy flows must be both ecologically viable and technologically feasible. Therefore, from a socio-metabolic point of view the structuring information is nothing more and nothing less than the pattern of flows that ensures the agroecological viability and technical feasibility necessary to achieve the socially adopted objectives to make the agroecosystems functioning.

Therefore desirability plays a fundamental role in shaping the structure and functioning of the farm systems that we currently have, as it happens in any attempt to advance towards more sustainable agroecological landscapes. To that aim the decision-making processes of agricultural policy, rural development and land-use planning have to be democratized, and this is why I am offering new models which can be used as a guide to foresee the functioning of new desirable agroecosystems. Humbly, I see this contribution as a small further step for reaching an Ecological Economics’ framework to improve participation in the design and implementation of innovative agricultural and environmental public policies.

There is a need, and also an increasing capacity to generate multi-criterial tools that facilitate these deliberative processes, to which I have contributed in this thesis mainly with the SFRA model. The ultimate goal is to define a new framework for economic exchange relationships. In fact, institutional systems have a controlling role in market flows. They could drive them so as to ensure that they are carried out in an ecologically and socially sustainable manner, or quite the opposite. In order to lead the economic functioning towards more sustainable scenarios –provided that democratic processes establish this priority—, the current market pricing mechanism must be turned upside down.

The dominant neoliberal approach to the way markets currently work is that prices should establish both the desirability and the cash viability of any production process that is technically viable. Under this predominant view of supply and demand, the only optimization considered is the one that maximizes profits through cost-benefit analysis. Every assessment is made only in terms of money, and any ensuing biophysical impact on the metabolic exchange between society and nature is considered a mere externality. Although market decisions move constantly a large amount of materials and energy flows that have strong environmental impacts, they are only taken into account according to the relative prices dictated by markets and the opportunities for profit they can offer. As a result, economic processes driven by markets are blind to any biophysical and social dimension. Once this socio-environmental blindness has already led to a global

Chapter 8. Conclusions

ecological crisis, it is necessary to question its inherent inability to face the long-term feasibility of decisions that are taken exclusively under market criteria.

A key point here is that markets will never provide a true democratic social validation through single-minded decisions taken by individuals isolated from each other which are only based on relative prices and profit margins. The fact that almost everyone participates in markets as price takers (leaving aside the fact that some have market power to be price makers) cannot be interpreted as if this socio-ecologically blind mechanism might solve the problem of a community-wide preference aggregation (i.e. overcoming Arrow’s impossibility theorem). Only a deliberative democratic process can do so, addressing complex multidimensional sets of the people’s real preferences.

The SFRA programming model allows defining which sustainable pattern of farming biophysical flows should be established between society and nature, and how the network of flows set among the agroecosystem funds should look like, to generate a specific type of cultural landscape. New reproductive economic analyses could take these results, established in biophysical terms using the SFRA model, to find out the relative price structure between different types of goods, and between labour and capital, required to achieve those aims adopted democratically. This would establish the conversion factors between biophysical units and market values (prices, wages and profits) that would have to be modified, and to what extent. Then, society will have to choose the appropriate economic instruments of social and environmental policy to make the desired socioecological pattern viable also in market value terms. Individuals would continue to be price takers, but community-wide democratic processes would become price makers to reorient economic exchanges, and the corresponding biophysical flows, towards more sustainable and fairer deals.

This sets out a path that is far from simple. However, according to our proposals and results it can be scientifically viable to make public policy proposals aimed at facilitating the necessary socioecological changes through regulatory norms, taxes, land-use planning, economic planning, public spending and investment, and other forms of state intervention. All these are forthcoming tasks for a new Substantive Economics that would no longer consider as occasional market failures the overshooting of many vital social and ecological limits at global scale. On the contrary, it will interpret them as the starting point for a new framework of socioeconomic and political relationships.