A subtle, indirect but nevertheless important further way in which environmental depletion damages economic health is through the extinction of species.
A particular species may not be throughput directly in the sense that a particular economic activity is based directly on that species. Its depletion will not be immediately noticeable either in direct job losses or in value inflation. Its disappearance may not be sufficiently noticeable to cause any sense of lower quality of life and thereby add to pressure for higher wages.
A classic case is that of the snail darter, a small species of fish in the United States of America.
The building of a huge dam was held up by an environmental law that barred any new development whose effects would include causing the extinction of any plant or animal species. In this case the habitat of the snail darter would be altered by the dam to such an extent as would threaten survival of the species. So the dam project appeared to be blocked.
This caused an uproar because compared with the economic “growth”, jobs, “wealth”, which people thought likely to flow from the dam, what possible benefit could result from skipping the dam and conserving the small fish?
The dam went ahead in the end because current economics contains no plausible answer to this question.
However, apart from the fact discussed previously and later that the dam would generate not wealth but throughput, not growth but throughput increase, far-reaching and devastating economic effects can flow from the disappearance of a species. Causes and effects are often separated by large time gaps with effects developing and causing other effects over an indefinite period rather than a cause taking place, having an effect, bang, at a particular time, after which people can say “Well, that’s over”.
It is timely to point out that the general ecosystem and the human economic system are part and parcel of the same larger entity, and while they might need to be treated separately for convenience, this separation is artificial and they are not in fact separate. What affects the ecosystem affects the human economy. The health of the parts depends on the health of the whole, and that of the whole on the health of the parts in any living organism. But this simple tautology is only valid if we are careful what is meant by health. Indefinitely expanding activity of any part at the expense of and without regard to the other parts is not health of the part and cannot promote health of the system.
The effects of the demise of the snail darter may not be known for some time. But a couple of examples can be given where the loss of a species (that is its loss by terminal extinction rather than by evolution into derived species) has had substantial adverse effects on actual and potential economic activity at a later date.
Individual members of the two species to be mentioned are much larger than an individual snail darter but this has little to do with the point being made here.
Beavers in North America were long regarded by forest industry and farming interests as a useless nuisance in economic terms, clever and interesting though beavers might be. These creatures built dams, limited water flow through forests, created beaver ponds. They were seen as interfering with human plans for water flow and usage and as obstructions to farm and forest industry machinery.
Beavers were thus shot for their fur, driven away, their habitats disrupted, and their work destroyed. Eventually large areas of forest and countryside were beaver free and water flowed strongly into streams and rivers.
But the economy did not benefit from this reduction of the beaver species. The water table in forests was lowered, soil was eroded, nutrients were leached from the soil. Tree growth was stunted or trees died. Areas of land previously fertile and productive became flood-prone and suffered salt encroachment and topsoil and nutrient losses. The margins of rivers became more poorly vegetated, making them vulnerable to break-up and thus threatening extensive flooding and massive topsoil loss.
So the reduction of one apparently economically useless species did not clear the way for faster economic growth, more jobs; in fact it led to substantial economic shrinkage by the loss or depreciation of important economic resources.
The beaver species has not yet suffered terminal extinction everywhere and efforts are now being made, in the cause of real economic progress and growth, to regenerate beaver populations in areas where they were formerly large but more recently reduced or eliminated by human interference.
Another example is that of the baleen whale. This species has a direct and obvious economic importance as a crop, unlike the snail darter, but this is not the point here. The point is the place of the baleen whale in the marine food chain.
The baleen whale feeds by filtering sea water through a dense structure in its mouth (formerly the “whalebone” used in corsets) to reject large animals and admit small zooplankton, particularly krill, a minute but abundant crustacean. Large masses of small creatures dispersed through large volumes of seawater are thus concentrated into large, far more easily caught bulks of protein.
Overfishing of baleen whales has reduced their numbers to the point where extinction threatens. Apart from making it necessary to find other sources of the materials provided by the whale, this reduction of baleen whales has left no efficient alternative means of harvesting the rich krill resources of the ocean. The krill resource has thus become less available, although its quantity hasn’t been reduced. Reduction in the availability of a resource is economic shrinkage, just as much as reduction it its quantity.
So in this example, reduction of the baleen whale species has not led to economic growth and jobs and progress and so on, but has caused economic shrinkage in two important resources – baleen whales and zooplankton.
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Posts in this Series
- Review of 1988 edition of Economics for a Round Earth
- Ends and Means
- Evolution Not Revolution
- Notes on Evolution Not Revolution
- Concepts and Terms – What is ‘wealth’?
- The Throughput Chain
- The Derivatives of Wealth
- Global Inequalities in Wealth
- Economic Growth Redefined
- Misconceptions in Practice
- Borrowing to Invest to Get Rich
- Environment versus Economic Progress
- Digression: Pollution Red Herrings
- Digression: Depletion and Inflation
- Value Inflation – the Trigger, not the Bullet
- Living Standard and Quality of Life
- Digression: Resource Consumption, Jobs, and Hands Off
- When the Boom comes
- The Effect of People’s Expectations
- Hard Work – Virtue or Vice?
- Who needs the Snail Darter?
- More Dollars for Conservation?
- Non-renewable Resources – Leave Them in the Ground?
- Digression: Fast Breeder Nuclear Fission Reactors
- Minerals in National Parks – Leave Them in the Ground?
- Population and Wealth
- Left, Right and The Environment
- Digression: “So Long As We Profit, Costs Elsewhere Aren’t Our Problem”?
- Limits to Growth?
- Solar Energy – a Special Case
- The Solar-Powered Car
- Money Supply, Throughput and Inflation
- Real and Money Wages: Living Standards
- Digression: Caution about “Increases” and “Decreases”
- The Idea of Proportionate Flows Applied to Wages: the Great Depression
- Deficit Financing
- The Optimum Proportionate Flow Condition
- Digression: Thrift versus Spendthrift
- Digression: the Private Motor Car – a Basic Necessity?
- The Idea of Proportionate Flows Applied to Wages – the Stagflation of the 1970’s and 80’s
- Excessive Wages Can Cost Jobs
- Fight Unemployment or Inflation First?
- Digression: Work and Jobs
- Other “Job Creation” Schemes
- Visual and Noise Pollution
- Digression: Renewal and Recycling of Resources; Wages and Jobs
- Ratio Distortion and Consumption
- Aggregate Demand – Components and Internal Ratio
- The Slave Economy
- Employment and the Steady State
- Consumer-Led Recovery
- Interest Rates and Ratio Distortion
- Demographic Trends and Living Standards
- Digression: Bad Economics Good for Conservation?
- Coping with Aging Populations
- Stabilising the Human Population
- Costs – What Really Costs Us and What Doesn’t?
- Digression: Other Comments on Statements in UN Report
- Discussion of Costs Resumed
- Budget Balancing Methods – Cost or Gain?
- Digression: Government Expenditure – Government Employees
- Expenditure on Weapons