What Every Conservation Biologist Should Know about Economic Theory

• Published in: Conservation biology 2010-12, Vol.24 (6), p.1440-1447
• Main Authors: GOWDY, JOHN, HALL, CHARLES, KLITGAARD, KENT, KRALL, LISI
• Format: Article
• Language: English
• Subjects: Animal, plant and microbial ecology; Applied ecology; Behavioral economics; biodiversidad; biodiversity; Biological and medical sciences; biophysical economics; cambio climático; climate change; Climatology. Bioclimatology. Climate change; Conservation biology; Conservation of Natural Resources - economics; Conservation, protection and management of environment and wildlife; Cost-Benefit Analysis; Earth, ocean, space; Ecological economics; Economic models; Economic systems; Economic theory; economía; economía biofísica; economía conductual; economía Walrasiana; energy; Environmental conservation; Essays; Exact sciences and technology; External geophysics; Fundamental and applied biological sciences. Psychology; Human Activities; Human behavior; International economics; Meteorology; Models, Economic; Parks, reserves, wildlife conservation. Endangered species: population survey and restocking; Sustainable economies; teoría económica; Walrasian economics
• ISSN: 0888-8892; 1523-1739
• DOI: 10.1111/j.1523-1739.2010.01563.x

The last century has seen the ascendance of a core economic model, which we will refer to as Walrasian economics. This model is driven by the psychological assumptions that humans act only in a self‐referential and narrowly rational way and that production can be described as a self‐contained circular flow between firms and households. These assumptions have critical implications for the way economics is used to inform conservation biology. Yet the Walrasian model is inconsistent with a large body of empirical evidence about actual human behavior, and it violates a number of basic physical laws. Research in behavioral science and neuroscience shows that humans are uniquely social animals and not self‐centered rational economic beings. Economic production is subject to physical laws including the laws of thermodynamics and mass balance. In addition, some contemporary economic theory, spurred by exciting new research in human behavior and a wealth of data about the negative global impact of the human economy on natural systems, is moving toward a world view that places consumption and production squarely in its behavioral and biophysical context. We argue that abandoning the straightjacket of the Walrasian core is essential to further progress in understanding the complex, coupled interactions between the human economy and the natural world. We call for a new framework for economic theory and policy that is consistent with observed human behavior, recognizes the complex and frequently irreversible interaction between human and natural systems, and directly confronts the cumulative negative effects of the human economy on the Earth's life support systems. Biophysical economics and ecological economics are two emerging economic frameworks in this movement.