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Leontief
Prize
"Reconciling
the Economics of Social and Environmental Sustainability"
Remarks
by Neva Goodwin
to introduce the 2001 Leontief Prize recipients
at Tufts University, on November 13, 2001
The Global
Development And Environment Institute instituted The
Leontief Prize for Advancing the Frontiers of Economic
Thought in March, 2000, when it was presented to Amartya
Sen and John Kenneth Galbraith. The prize is established
in honor of Wassily Leontief who was a member of GDAE's
advisory board from 1993 until his death in 1999.
Its purpose is to recognize outstanding contributions
to economic theory that address contemporary realities
and support just and sustainable societies.
I will say
just a little about the great economist after whom
this award is named.
A paper written
by Alice Amsden, as a tribute to Leontief on his 90th
birthday, begins by quoting the following letter:
Dear Keynes,
I want
to apologize for Leontief. He has indeed produced
what I consider to be a most original and interesting
piece of work. But then, instead of finishing the
article, he got married, in spite of my disapproval
of the step. This explains the delay.
Yours
very sincerely, Joseph A. Schumpeter
All of us have
had occasion to apologize for a late paper. Some of
us have been fortunate enough to have someone else
write the apology for us. Few others could have had
the apology written by Joseph Schumpeter to John Maynard
Keynes.
Amsden's paper
continues by saying: "Wassily Leontief not only disobeyed
Schumpeter in getting married, but also bucked the
conventional wisdom of the economics profession in
striving towards inductive theory, based on input-output
analysis, about how economies work."
That description
touches on the essence of why we are honoring Leontief,
and doing so by honoring Herman Daly and Paul Streeten.
What all three have in common is a dedication to looking
at the real world first, and putting it into theory
second. They also have in common the fact that they
have done this superbly well in very different ways,
but each with a very wide field of concern.
I want to note
two other thing that Streeten and Daly happen to have
in common. One is that they both have had important
associations with the World Bank. Daly was senior
economist for its Environment Department, from 1988
to 1994. Streeten has been associated with the Bank
in a variety of ways, including his strong influence
in getting Robert McNamara to focus on poverty and
basic needs, and later efforts to get the Bank's Economic
Development Institute to return to these basics.
This speaks
very well for the World Bank that it was able to value,
and listen to, two such people, who have always been
outspoken in their disagreements with mainstream thinking,
and their conviction against the stream that the point
of economics is to make the world a better place.
The other
fact which has brought their names together arose
out of a long project at the Global Development And
Environment Institute, which produced six books on
Frontier Issues in Economic Thought.
The capstone
volume in the series is called A Survey of Sustainable
Development: Social and Environmental Dimensions.
It was obvious
to all of us who were involved with this that there
were two people who have been most influential in
moving the world's thinking about development towards
an understanding of sustainability, in social and
environmental terms. We dedicated the book
to Paul Streeten,
whose work has been central to the field of human
development, and
to Herman Daly,
who has led the way on issues of environmental sustainability.
Introduction
to Paul Streeten
I had the great good fortune of having Paul Streeten
as a teacher and dissertation director. I sometimes
forget how much of my thinking I owe to him, but had
the humbling experience, recently, of reviewing the
first chapter of a textbook I have been writing, with
colleagues here and in Russia, and in the same day
re-reading several articles by and about Paul. This
review produced, on the one hand, a touch of chagrin
- I had thought some of those ideas were my own -
but the larger feeling was relief, to discover that
I really have kept to the path that he had marked
out.
It isn't usual
in an introduction to offer a biography that goes
back to the speaker's birth - but I can't resist a
good story, and Paul Streeten's life is full of extraordinary
stories. I'll touch on only a few of them.
He was born
in 1917, and grew up in Vienna between the two World
Wars. In his accounts we encounter some of the great
names of the era, such as Karl Popper, with whom Paul
played handball on Sundays in the Vienna woods, and
Wilhelm Reich, who advised the family on the children's
sexual education.
In that environment
it seemed natural to Paul to become politically active,
starting at the age of ten, but he had an internal
compass that steered him away from extreme ideologies
- though always finding more attraction on the left
than the right. After 1933 his political activities
went underground, with continual threat of arrest
or imprisonment.
The Anschluss
in 1938 forced the family to flee Austria. Saved by
friends and by luck, the family scattered around the
globe; Paul saw none of them again for 9 years. He
landed in England, in a kind home, but in 1940 was
interned as an enemy alien. He was moved from one
site to another, but in each one was at the center
of efforts to set up lecture groups, study groups,
a camp university. After two years of more or less
prisoner status, he was able to join a commando group
which, in 1943, was sent on the invasion of Sicily.
While waiting for the action to begin, he organized
a drama group among the local children. He was landed
behind enemy lines, and after a few weeks of intense,
heroic activity, was severely wounded.
The professional
life which produced Streeten's extraordinary output
of writing and influence could be said to have begun
formally in 1944, when he went to Baliol, Oxford.
He stayed there to teach from 1948 to '64. Other institutional
affiliations have included the Development Studies
unit at the University of Sussex, which he helped
to found; and the UNDP group that creates the annual
Human Development Report. These widely influential
reports, authored by a collaborative group that also
includes Amartya Sen, exemplify the continuing impact
of Paul's thinking, and of his seminal book, First
Things First: Meeting Basic Human Needs in Developing
Countries.
I first knew
Paul Streeten during the 1980s and early 90's at Boston
University, where he was a professor and director
of the World Development Institute. In between the
institutional attachments I have mentioned he did
an astonishing number of other things. An ILO mission
on Basic Needs to Tanzania, and the Advisory Committee
of the Arab Planning Institute in Kuwait are just
two samples. Even leaving aside entirely his numerous
articles - he has published an average of 15.36 articles
per year over the last 11 years - I have only time
left to mention a very small number of his books.
But you should be aware of titles such as The Frontiers
of Development Studies,Trade Strategies for Development,
Strategies for Human Development, Global Poverty and
Unemployment, and the most recent one of which
I'm aware Globalization; Threat or Opportunity?
He states
his current interests as social capital, human development,
globalization, NGOs and participation, inequality,
culture and poverty.
As usual, he
doesn't leave much out.
Introduction
to Herman Daly
Daly I first met Herman Daly in the early 1980s, at
a meeting at Wingspread, Wisconsin, bringing together
people who were interested in shifting the emphasis
of economics theory and policy, to pay more attention
to some difficult issues that had largely been laid
aside for much of a century, while the discipline
focussed on the issues that were most tractable to
available analytic techniques.
Even in those
early days, before the field of ecological economics
took off publicly, it was easy to recognize Herman
as one of the leaders in bringing important new ideas
into economics. It has been said that great ideas
are, at root, simple ideas, and Herman is one of those
outstanding individuals in intellectual history who
have been able to use an idea that seems simple after
it has been explained to you to revolutionize a field
of thought.
In this case,
the seemingly simple idea is that the scale of economic
activity matters. Processes of economic production
and consumption, which are quite sustainable in a
world of ample natural resources, become unsustainable
when carried out on a scale that overloads the capacity
of natural systems to supply raw materials and to
absorb wastes. Now that this idea has been widely
disseminated, it does indeed seem to be obvious. It
is borne out every day by new stories in the papers,
of environmental damage and degradation, and of the
uphill struggle to preserve the ecological functions
which support our economies, and our lives.
But in standard
macroeconomics, as Herman has eloquently pointed out,
there are no limits to economic scale, and virtually
no consideration of the environment. Models of economic
growth show a continuous upward path with no apparent
endpoint. The goal of macroeconomic policy is seen
as avoiding recessions or growth slowdowns, but no
problems are seen with ever-increasing economic production
for a growing global population.
Herman's intellectual
influence has been immense, both among those economists
who are willing to consider new approaches, and among
scholars, in many disciplines, who see how essential
his perspective is to devising a global economic system
that can offer a livable world for our children and
grandchildren and for ourselves, since the environmental
threats we face are not in the far future but here
and now. The thriving International Society for Ecological
Economics is evidence of the continuing ferment, and
of a deepening process of intellectual discovery,
as thousands of scholars from a wide range of disciplines
pursue the implications of the fundamental ideas that
Herman has set out. His essential books include: Steady
State Economics, Valuing the Earth: Economics, Ecology,
Ethics (coedited with Kenneth Townsend); For
the Common Good: Redirecting the Economy Towards Community,
the Environment, and a Sustainable Future (co-authored
with theologian John Cobb); Beyond Growth: The
Economics of Sustainable Development; and Ecological
Economics and the Ecology of Economics.
In addition
to these books, and over a hundred professional articles,
Herman has received the Grawemeyer Award for Ideas
for Improving World Order, Sweden's Honorary Right
Livelihood Award, the Heineken Prize for Environmental
Science awarded by the Royal Netherlands Academy of
Arts and Sciences, and Norway's Sophie Prize for contributions
in the area of Environment and Development.
For those of
us whose efforts to think about economics, the environment,
and community have been inspired and illuminated by
Herman Daly's ideas, the best tributes to his work
are not awards not even the Leontief award but the
indelible impression he has made on the thinking of
several generations of economists, social and natural
scientists, and scholars and students in many fields
and indeed, of anyone who takes seriously the future
of our society and our world.
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