Production and Environmental Resources: A Prelude to an Evolutionary Framework

The paper advances a framework to study the evolution of technology and institutions. It is based on two simple tenets. First, the quality and quantity of environmental resources are defined and constrained by the of technology and institutions. Second, the character and extent of innovations are informed and limited by the as well. The framework is contrasted with neoclassical and ecological economics. While the framework assimilates ideas from both paradigms, it departs from them by stressing the importance of the technological/institutional regime (TIR). The two views ignore, in different ways, the significance of TIR [46]: The neoclassical program conceives the flow of innovations as TIR-independent, while the ecological agenda regards the fund of resources as TIR-independent.1 Consequently, both camps fail to provide an endogenous account of the observed punctuated character of the evolution of TIR. Neoclassical economists maintain that as a resource depletes, its price rises which induces switching to a cheaper one, encourages exploration, or spurs invention. Harold Barnett and Chandler Morse [7, 11] state that imposes particular scarcities, not an inescapable general scarcity. The responses to environmental resource limitation are supposedly singular activities, stripped from any underpinning regime. The neoclassical disregard of TIR heuristically resembles the fable of Marie Antoinette's folly. In response to the scarcity of bread at the eve of the French Revolution, she advised-according to legend-buying cake instead. Ecological economists offer a different view of resource limits [48]. For Herman Daly [21, 8], nature really does impose 'an inescapable [general] scarcity'. While neoclassical economists emphasize relative limitation (scarcity pricing), ecological economists stress Malthusian, general limitation. For ecological economists, substitution can solve relative allocation but cannot solve general limitation. General limitation can be avoided only if economic activity proceeded within certain boundaries or, as put by Martin O'Connor [69], within appropriate cyclical structure of resource transformations. Under the motto sustainable development, a low-pace production activity supposedly enables a population to replicate indefinitely. Ecological economists conceive