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The Limits of the Market Economy with Respect to Public Goods or Why Ecological Economics?

For most of the history of our planet, there was a superabundance of natural resources and ecosystem services. As civilization began to develop, the allocation of resources became one of the primary functions of society to help it grow and prosper. The market economy developed in response to this need for an efficient allocation of resources and has performed exceptionally well in this capacity. Now, however, the relative abundance of natural resources and the strength of ecosystem processes is rapidly declining. Consumer goods are becoming superabundant, and ecosystem services are growing scarce. Unfortunately, ecosystem services are often goods that are nondepletable and nonexcludable (such as climate regulation and the ozone layer). Because these goods are nonexcludable, there is no incentive at the market level to work towards their conservation, or to develop substitutes in response to their increasing scarcity. If we want to keep these ecological services intact, we must push for policy that makes industry, agriculture, and consumers pay the real costs of their consumption.

Josh Farley is one of a few pioneers in the emerging field of ecological economics, an interdisciplinary field that studies both market systems and ecological systems holistically. After completing his B.A. in biology at Grinnell, Farley spent 18 months exploring Latin America on his own recognizance. The experience convinced him to shift his focus to international development, and upon his return to the U.S. he earned a M.A. from Columbia University in international and public affairs, with a focus on economic and political development. Upon completing his master's degree, Farley began work on a Ph.D. in agricultural, resource, and managerial economics at Cornell. Frustrated with the neoclassical approach to economics stressed at Cornell, he switched his focus to ecological economics (an emerging discipline he had been exposed to at a conference in Brazil), After successfully defending his dissertation, he journeyed to the rainforest of the Atherton Tablelands in Queensland, Australia, where he taught ecological economics and applied research techniques for The SchoolField Studies. When offered the opportunity to work for the Institute for Ecological Economics, the premier institution studying this emerging discipline, Farley returned to the States.

Farley's career is an example of how physical exploration can lead to clarity of internal vision. By actively pursuing answers in nature, he refined his economic vision and his own personal beliefs. It is an honor to welcome Josh Farley as part of our series on Environmental Activism, sponsored by the Roberts Environmental Center.