‘Green’ Alternatives To Capitalism And The Need For BioPhysical Economics

There have been increasing calls to re-examine or reform capitalism since the Global Financial Crash in 2008. That arguably very little has changed will be the subject of another article, but in this piece the focus is on some of the main alternatives to capitalism along with an extra twist: they also will be examined in the light of how the system known as biophysical economics (BPE) could help make them better by informing and complementing them and also offering a kind of physical reality check. Biophysical economics is an approach to economics based not only on the social sciences, as is the case with conventional, i.e. neoclassical, economics, but also on natural systems as well. 

There is a sting in the tail of this piece, but that will be, well, left to the end.   

1. Green Capitalism*

While still a form of capitalism, green capitalism modifies traditional models to focus more on sustainable practices. Businesses might be incentivized through tax benefits, and new markets might be created around “green” technologies. Critics would argue that this is a short-term ‘solution’ that still perpetuates consumption culture.  

Biophysical economics could serve as a rigorous analytical framework within green capitalism. By identifying the physical limitations of resource use, biophysical economics can inform better policy and business decisions to align with sustainable practices. However, it is likely that rigorous application of biophysical economics would soon show that green capitalism is not sustainable.

*green capitalism is obviously not really an alternative to capitalism.

2. Green economy

This prioritises sustainable development through things like renewable energy, resource efficiency, and environmental protection regulations. A green economy tries to integrate environmental sustainability into economic models.

Biophysical economics could serve as the analytical backbone for a genuine Green Economy by quantifying the physical constraints and ecological impacts of various economic activities. It would offer metrics for resource efficiency and help to scientifically validate the sustainability of renewable energy sources and other green technologies. Again, however, it is likely that BPE would show that just substituting energy types and trying to be more efficient is also not sustainable. Jevons Paradox makes this point by showing that energy efficiencies simply lead to even more consumption – humans just love using energy.

3. Steady-State Economy  

This model advocates for stable or mildly fluctuating levels in population and consumption of energy and materials within ecological limits. It seeks equilibrium, prioritising stability over growth, focusing on qualitative development rather than quantitative growth. However, Steady-State is often criticised for being idealistic, as it assumes that human behaviour and market forces can be reined in easily to achieve this balance.

The steady-state economy’s focus on equilibrium and material balance aligns closely with the principles of biophysical economics, which also considers how to maintain balance within ecological limits.

4. Degrowth

This is a political, economic, and social movement based on ecological economics, anti-consumerist, and anti-capitalist ideas. It focuses on the down-scaling of production and consumption, particularly in advanced economies, aiming to reduce environmental impact and resource depletion by leading a simpler way of life and thus using natural resources in a sustainable way. It involves fundamental rethinking of growth as an economic objective. Degrowth has detractors who claim that it can lead to economic instability and social unrest – but that is ironic and hypocritical, given how much instability and social unrest capitalism has caused.

Biophysical economics aligns closely with the goals of degrowth. It (BPE) could provide the empirical data needed to guide the degrowth movement and help make informed decisions about which sectors should be scaled back and to what extent. It would also help quantify the environmental impact and resource limitations, thereby supporting the case for degrowth as a necessary strategy for long-term sustainability.

5. Socialism 

This involves collective ownership of production and more democratic control over the economy. Socialist systems aim to distribute resources more equitably and sometimes emphasize environmental sustainability over growth. Their environmental and sustainability track record, however, has not been very good, to put it mildly.

Within a socialist framework, biophysical economics could (have) offer(ed) insights into the most efficient and sustainable ways to distribute resources. It would provide (or could have provided) a scientific basis for collective decision-making, ensuring that production and consumption do not exceed ecological limits. In socialist systems emphasising environmental sustainability, biophysical economics could guide policy by identifying the most ecologically sound methods of resource allocation.

6. Eco-Socialism

Eco-socialism critiques capitalism’s focus on endless growth and profit as inherently unsustainable, instead arguing for democratic control of the economy to enable ecological sustainability, an egalitarian distribution of wealth and power, and grassroots mobilisation to transform society’s relationship with nature. Combining elements of socialism with green economics and ecology, eco-socialism advocates collective ownership of productive resources, economic democracy, and socially equitable stewardship of the planet. Critics often question its practicality and effectiveness in achieving both social and environmental goals, but until or unless it is tried at scale in a stable polity, it will be hard to assess.

Biophysical economics could help eco-socialism by providing a scientific basis for the equitable distribution of resources. It could serve to identify the ecological constraints within which a socialist system must operate.

7. Circular Economy

This economic system focuses on re-usability, sharing, repairing, refurbishing, and recycling existing materials and products, aiming for a closed-loop system where all waste is either reused or recycled. The idea is to create a system where there is no waste, much like natural ecosystems. While aspects of a circular economy have been successfully implemented at smaller scales, critics question its feasibility on a larger, global scale.

The circular economy’s goal of eliminating waste and promoting reuse is compatible with the tenets of biophysical economics, which would analyse the energy and material flows to make the circular economy as efficient as possible.

8. Doughnut Economy

Proposed by British economist Kate Raworth, the doughnut economy aims to balance social needs with ecological constraints, visualised as a doughnut’s inner and outer boundaries. It incorporates circular economy principles to minimise waste and does not prioritise GDP growth, focusing instead on human well-being and environmental sustainability. The model offers a framework for an economy that aims to fulfil basic human needs without exceeding planetary limits.

Biophysical economics could provide the empirical foundation for the Doughnut Economy’s conceptual framework by quantifying the physical and ecological constraints that define its “ecological ceiling.” It could also offer metrics for assessing the efficiency of circular economy practices within the doughnut’s boundaries. This analytical approach could help ensure that efforts to meet human needs were scientifically grounded and did not overshoot ecological limits.

9. Resource-Based Economy

Popularised by American social engineer Jacque Fresco, this system proposes the use of the best available scientific and technical knowledge to provide an abundant supply of goods and services without the use of money, barter, or any other system of debt or servitude. The allocation of resources is based on environmental protection, conservation, and ethical human needs rather than monetary gain or profit motive. Critics point out that this system is too utopian and not practical on a large scale.

A resource-based economy, which emphasises scientific methods for resource allocation, is highly compatible with biophysical economics, as both aim for the most efficient and sustainable use of physical resources.

10. Commons-based Peer Production

This model promotes the communal management of resources with an emphasis on shared ownership and decentralisation. Open source software is a prime example. While it has been successful in certain niches, it’s unclear how well it would work for entire economies.

Biophysical economics can offer tools for the efficient management and sustainability of common resources, which is a concern for commons-based systems.

11. Participatory Economics

Also known as “Parecon,” this economic model aims to achieve egalitarian outcomes through new forms of economic decision-making. It replaces markets with participatory planning, where individuals and producer and consumer councils negotiate and plan the economic outcomes. It is definitely a stretch, however, to imagine humans managing to negotiate vital resource sharing in a peaceful way for extended periods of time, especially as those times will get tough.

While participatory economics focuses on social and decision-making structures, biophysical economics could serve as a grounding methodology to ensure that the participatory planning does not exceed ecological limits.

The sting in the tail is that when one of the founders of biophysical economics, Prof Charlie Hall, saw this list of alternatives in the light of BPE, he said at first, “good taxonomy I think”, but then, “actually I do not think any of them really address the fundamental issues we face: how do we run an economy that can take care of, in any meaningful way, 8+ billion people on a decreasing energy (and groundwater and fish and…) base. So much of it is delusional….” 

It will take a separate article to assess how these different alternative economic systems address overpopulation, but it is fair to say that overpopulation has been such a hot potato for about fifty years that almost no one wants to touch it. Historians of the future will likely spill much ink trying to fathom why, when every human and ecological problem would be easier if there weren’t so many of us.