ECONOMICS OF THE COMING SPACE SHIP EARTH

KENNETH BOULDING

Prof. Prabha Panth,Osmania University

12 Apr 2023 Prabha Panth 2

Concept of the Earth

• Earlier people thought that the Earth was without limit.

• It could supply natural resources infinitely.• Earth was “Open Access” – i.e.

– Anyone can use the natural resources.– No problems of disposal of wastes.– Natural resources can be exploited without

limits, as they were infinitely available.

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Cowboy Economy • Kenneth Boulding calls this as

the “Cowboy Economy”.• Humans were exploitative and destructive.• After using and wasting an area, they would

move to new areas to exploit.• They did not bother about natural resources

depletion, because new areas are always available.

• They did not bother about pollution, for when one area is polluted, they can move to a new place

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Cowboy Economy

• More and more Consumption is regarded as a good thing

• So also more and more production.• Assuming that natural resources are

available infinitely, then this is possible.• Also it is assumed that the Earth can

dispose of the wastes created by production and consumption.

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Boulding’s criticism• Boulding pointed out that the Earth is

limited.– The total stock of natural resources on this

Earth is finite.– All economically available areas on Earth are

occupied. – No new areas to conquer and exploit.– Not possible to have the “Cowboy” type of

economy – of using and discarding land and resources.

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Closed System•Therefore the Earth is a closed system.• In a closed system, all inputs and outputs are interconnected.– Nothing comes from outside, except sunshine.– Nothing can be thrown outside the Earth into Space.– The economies of the Earth should sustain themselves with the available resources of the Earth.– The wastes also have to be retained on this Earth.

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Econo-sphere• The world economy can be thought of as

an "Econo-sphere" – It is a subset of the Global system.– Inputs: production adds to stock of economic

goods, – Outputs: consumption which subtracts from it,– Natural resources flow into the economic

system,– And wastes flow out, but do not enter the

economic system.

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Space Ship Earth • Boulding points out that the Earth is a

closed system, circulating in space.• It is like a SPACE SHIP.• It is completely self reliant.• Only solar energy comes from

outside.• Humans cannot dispose off their

wastes outside.• There is no “outside”.

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Space ship Economy• All natural resources have to be recycled

to sustain the economies.• Stock of natural resources should be kept

constant not wasted.• All wastes created have also to be kept

within the Earth. • Necessary to reduce output• And reduce consumption.• Minimisation not maximisation

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In a Space Ship Economy:• Technological change should aim at the

maintenance of a given total stock of output.

• Reduce output (that is, less production and consumption)

• Reduce depreciation and obsolescence.• Develop technology that can recycle

wastes.