Can Capitalist Modes of Production Be Biophysically Sustainable?

Environmental economics rooted in the neoclassical paradigm is ineffective and problematic. Viewing environmental degradation as simply a market failure has a distributional effect which disproportionately harms those with lower incomes and causes inequality. The mainstream anthropocentric approach, such as environmental valuation based on cost-benefit analysis and willingness to pay models, is unlikely to assess the intrinsic value of nature, but reflects only nature’s perceived market value. This chapter offers an alternative to the mainstream paradigm. The author examines the heterodox approaches to the environment for their compatibility with a truly sustainable development path. The chapter begins by looking at the similarities and differences between Post Keynesian (PK), institutional economics (IE), and ecological economics (EE) and the efforts that have been put forward to bridge the differences. The second section provides an analysis of why a capitalist mode of production might not be compatible with these alternative approaches. The third section introduces philosophical paradigms of other socioeconomic forms that could be more consistent with sustainable development. The last section presents conclusions and recommendations.