ABSTRACT
The origins of neo-classical economics lie in nineteenth-century classical physics with its emphasis on laws of motion and equilibrium. Taking his lead from Marshall, a major contributor to neo-classical economics at the turn of the twentieth century who suggested that economics should be founded on biology, Daly wrote about ‘economics as a life science’ in his insightful and provocative paper by that name published in 1968. By drawing out the parallels between economics and ecology and suggesting heuristic and analytical ways in which they can and should be integrated, Daly anticipated not just ecological economics but also the integrated assessment models which have become widely used in studies of climate change. He also described an environmentally extended input–output table and the metabolism of economies.
Daly’s insistence that the laws of thermodynamics are relevant to economics is foundational in ecological economics and fundamental to his observation that the world has transitioned from ‘empty’ to ‘full’ in terms of people and their artifacts. His graphical depictions of this transition have been very influential. However, these ideas are yet to be accepted by mainstream economists. Daly’s debates with several economists, including Robert Solow and Joseph Stiglitz, are discussed at length in this chapter.
