Transformational Economics and the Public Good

Abstract

Neo-classical economic theory attempts to make contact with the world at both the cultural and the natural levels of organization. In both cases it does so by means of assumptions of equilibria and homogeneity, which, recalling the insights of Georgescu-Roegen, fail to take into account complex processes of material transformation. Thus, one can generally characterize neo-classical models in terms of the steady flow of goods from an abstract external space of resources (Ricardian land — nominally acknowledged to be the natural environment) to an abstract internal set of consumers (populations — nominally acknowledged to constitute society). A judicious (some would say “opportunistic”) interpretation of Pareto’s welfare theorem is taken to warrant the minimization of government, the identification of the public good with taxpayer interests, and the aggressive promotion of markets, not only markets for goods, but for goods, services, and ideas. In this paper I shall focus my attention upon the natural resource aspects of this model by extending and critiquing important elements of Georgescu-Roegen’s approach to economics, an approach grounded in the interpretation of economic processes as transformations of ordered systems. It will be shown in what sense these processes are best understood as the production of wealth, and shown further how this interpretation relates to a normative realism which requires that the concept of the public good be reinstated as a central construct within any future normative economics.