Classical Political Economy
One way of pursuing this thought is to consider the sort of approach to economic life that prevailed before the ‘marginalist’ revolution, from which ‘mainstream’ environmental economics has been derived, took place.
This much earlier approach, classical political economy, was pioneered by Adam Smith and David Ricardo. This alternative tradition grounded its approach to economics not in the ‘subjective’ play of supply and demand in the market, but in the recognition of real conditions and constraints in production and consumption. One of the central concerns of Smith and Ricardo was the possibility of future limits to the accumulation of wealth in the ‘commercial society’ which they broadly advocated. One threat might be a collapse of demand once people had enough to eat, given that ‘the desire of food is limited in every man by the narrow capacity of the human stomach’ (Smith 1776, 1999: 269; Ricardo 1817, 1971: 294; see Benton 1995a). Both Smith and Ricardo dismiss this pessimistic thought, recognizing that ‘the desire of the conveniences and ornaments of buildings, dress, equipage, and household furniture, seems to have no limit or certain boundary’. But as we saw in Chapter 13, Malthus (a friend of Ricardo) had argued strongly that there was such a limit - one imposed by nature itself - the ratio of population growth to the capacity to expand agricultural production. Ricardo does not dismiss this possibility directly, but offsets a possible decline in the profitability of agriculture by the expectation of a potentially limitless expansion of demand for non-agricultural goods.Although these political economists were at pains to show that the accumulation of wealth was potentially unlimited, they were sufficiently grounded to consider the conditions upon which continued wealth accumulation depended. With the exception of a minority of goods, scarcity itself was not a measure of value. For most goods, value was determined by the labour required to detach materials from nature and transform them to serve some human use.
Scarcity figured only indirectly through the greater or lesser human effort required to produce a commodity for exchange on the market. Beyond that, other ‘spontaneous productions of nature' such as the air, water and atmospheric pressure need not figure in economic thought because they were present in unlimited abundance, and free for anyone to use. So, in arguing for the limitlessness of wealth accumulation, both Smith and Ricardo do give us insights into its conditions, and so, what might set limits to it: labour, as the source of wealth, and nature, insofar as it is limitless and freely available to all.The case of land, an aspect of nature that was definitely neither unlimited nor freely available, was a persistent problem for their approach, with sharp differences between Malthus and Ricardo on rent on land, and the economic status of landowners. This brings us to another respect in which these thinkers differed from later ‘neoclassical' economists, and modern environmental economists such as Dasgupta. For the classical economists, the distinct parts played by different groups in the economic system defined distinct interests, dependent on their different source of income. Wages, profit and rent defined the three major classes of the emerging ‘commercial' society: workers, capitalists and landowners had distinct and often conflicting interests. For Smith, too, political economy was a branch of the science of a statesman or legislator, with one of its purposes to ‘supply the state or commonwealth with a revenue sufficient for the publick services' (Smith 1776, 1999: Bk IV. 1).