A decade ago, six environmental lawyers constructed a framework for understanding how humans collectively relate to the natural world in an intimidating crimson tome titled Environmental Law and Policy. First, they offered a definition of the word “economics” as “the rules that govern the human household.” They noted: “Economics usually is given a narrower reach, evoking solely the concerns of the marketplace or the market economy,” which is an expansive landscape of itself. But their definition of “economics” conjures a vaster place, an entire planet, really, because that’s what the human household is.
The framework is visualized in three concentric circles. The marketplace, which is what we generally mean when we use the term “economy,” makes up the smallest concentric ring and consists of complicated and abstract notions, such as money or banks. These concepts can be regulated because we made them up and they conform to our rules.
The middle ring is the “Civic Societal Economy,” which includes social values, culture, personal human relationships — essentially all human activity not measured in the small ring. A good example is the labor of parenting, which is an enormously important industrial act that is left out of the marketplace’s web of metrics. Another is housekeeping; another is volunteering. Again, such things can be regulated because they are social constructs; humans created them, and we are therefore their overlords.
The matrix in which both smaller rings evolve is the natural economy: “the intricate system of living and geophysical systems that sustains dynamic planetary processes, providing resources and a geophysical base for the human economies.” We cannot regulate this because it abides only by rules that predate human society.
Within the context of environmental crises — climate change, species collapse, pandemics — this framework exposes a systematic failure in the small ring of economic accounting. In current practice, the marketplace is “systematically blind” to the bigger rings because it is primarily focused on generating profit.
On the whole, the small ring has no value system other than economic growth. We see this, for example, when people making the rules for the small ring are ready to sacrifice certain human life to allow more economic growth. In this way, the small ring is like the Terminator from the A.I. movie franchise, which will stop at nothing to achieve its objective, not even its own destruction.
Much of the time, problematic activity in the small ring can continue, at least for a time, because the problems manifest outside of the small circle. One classic — and visceral — example is cancer clusters. When a paper mill dumps carcinogens into a water supply, as paper mills have been known to do, local cancer rates increase. This does not affect the small ring because local cancer victims are not the sole clientele of the company that runs the paper mill. This is tritely called an “externality.” (Paper companies have spent much treasure fighting lawsuits over cancer clusters.)
But like the Terminator, the paper company can be suicidal. It doesn’t see far enough in the future to anticipate the conditions of its own demise because it measures success on a quarterly basis. The Terminator’s goal is to dispatch a target; the paper company’s goal is to satisfy investors.
Though we cannot regulate the large ring, we still exist inside it. So when the rules we impose on the systems in the small ring disagree with the rules that exist independently in the larger rings, all systems become stressed and begin to collapse.
For example, the rules in the small ring allow us to emit large amounts of greenhouse gasses into the atmosphere, altering its chemical dynamics. But while the rules in the large ring do not physically stop us from doing so in the short term, they will make life on this planet, as it’s evolved, impossible to perpetuate. There will be an ecological collapse, and because the small ring exists inside the large ring, an economic collapse will follow the ecological one.
A full economic collapse that toppled the entire system of concentric circles would affect each ring differently. The small ring would simply be a casualty because it is not real. It doesn’t feel anything. It exists only in human imaginations as what historian Yuval Noah Harari calls an “intersubjective reality.”
The outer ring, which thrives on geologic time, would simply reset over the course of a few million years, orders of magnitude longer than the small rings existed but only minutes on the Cosmic Calendar.
The middle ring, however, is built of human life and would register immense suffering. This is the one we care about. It’s the one that “comprises actual social costs, benefits, resources, energy, inputs, outputs, values, qualities, and consequences that are not accounted for in the marketplace.” The damages incurred in the marketplace often step out of the small ring “but don’t thereby drop into oblivion.” They have to go somewhere. And where they go is a physical reality that affects us.
The lawyers argue that we need to find a balance between the inner and outer rings, and they are right. But, as they note, in caring about the small ring, we have failed to perceive, account for, and love the others. That is a cosmic tragedy.