Valuing the Earth: Economics, Ecology, Ethics.

• Author: Durning, Alan Thein

In 1973, a renegade economist named Herman Daly compiled an anthology of essays that questioned the wisdom - and possibility - of a perpetually expanding economy.

Arguing that "at some point ... an extra unit of Gross National Product costs more than it is worth," Toward a Steady-State Economy was ridiculed by the economic orthodoxy, but became a classic of the fledgling school of ecological economics. The book contained seminal works from the likes of theorists Paul Ehrlich, Garrett Hardin, and E.F. Schumacher, and it passed from hand to hand in little-known study ccnters like Washington's newly created Worldwatch Institute.

This year, Daly - now a senior economist at the economic profession's most prestigious club, the World Bank - has joined forces with Kenneth Townsend of Virginia's Hampden-Sydney College to revise that anthology and make it available to today's much larger audience. They have added new essays, deleted some that were no longer salient, and introduced the older texts with updated explanations.

The effort was well worth making. Valuing the Earth: Economics, Ecology, Ethics, as the new volume is called, is as relevant as ever. And though some of the commentary it contains is dated, its central theses only stand out more clearly with age.

The crux of their argument is the concept of scale, defined as the physical "size of the human presence in the ecosystem." Scale can be thought of as human population times per capita resource use, or, more simply, as "how many people consume how much stuff."

Conventional economics envisions the human economy as a circular affair. An immaterial stuff called "utility" - consisting of the satisfaction of people's desires - is made concrete in the form of money and moved from producers to workers and consumers back to producers back to consumers and so on forever. Because utility is immaterial, the economy is seen as unhindered by any theoretical limits to growth.

Ecological economics recognizes the importance of the money circuit but sees it as a subset of a larger system - a system in many ways analogous to a water wheel. As falling water drives a water wheel, so do energy and material resources drawn from the natural environment fuel the economic wheel. Just as water at a lower level of potential energy flows away from the water wheel, pollution and waste flow out of the economy.

In the terminology of ecological economics, these inputs and outputs together - the coal, timber, coffee cups...