ABSTRACT
Since the second half of the twentieth century, in particular, the Western industrialized world has experienced an unprecedented economic “growth” that is customarily expressed in terms of GDP. Industrialization, manufacturing and growing markets have paved the way for exploiting the benefits of so-called “increasing returns” that are at the core of CC growth theories. In this very same economic process, however, the enormous wealth of biotic renewable resources, such as fisheries, has been reduced and exploited to an extent that has brought many of them near collapse and several species near extinction. Depletion of renewable and non-renewable resources as well as pollution are real costs that remain unaccounted for in markets. This is why an accounting in terms of market values underlying concepts such as “economic growth” (GDP in market prices) and “increasing returns” (in terms of exchange values) has been fundamentally criticized in the planning debate of the 1920s and 1930s, by the ecological development movement in the 1960s and 1970s, as well as by the movement for social cost accounting and green GDP in the 1980s and 1990s. In other words, the ecological context matters and economists must not turn a blind eye to the wealthdiminishing aspects of growth in manufacturing. In order to capture these important aspects, this chapter proposes Myrdal’s and Kapp’s CCC. First, we identify common characteristics between Myrdal’s principle of circular cumulative causation (CCC) and the pre-analytical vision of ecological economics (EE), as exemplified by its treatment of fisheries. It is argued that there is a common “complexity perspective” that goes back to the 1940s when K. William Kapp applied the CCC to socio-ecological problems. Hereby, we demonstrate how CCC serves as a common denominator concept for institutional and EE. Second, we provide a circular cumulative causation analysis of the life cycle of salmon, and the social costs of salmon depletion and farmed salmon. Kapp’s CCC-based theory of social costs captures the wealth-diminishing
features of the economic system. The CCC perspective leads to a social minima approach in which states of social and ecological balance become part of economic rationality.
