The halfway house: Democracy, complexity, and the limits to markets in green political economy

Abstract

The argument of the Austrian school of economists that markets are indispensable in the face of social and economic complexity is of defining importance for the modern-day case for markets. The dominant paradigm in green political economy accepts this view, whilst proposing that markets be combined with a thick layer of democratic, non-market institutions to ensure environmental sustainability. Closer attention to the relationship between the Austrian and green arguments reveals important implications for both. The Austrian thesis raises significant challenges for the ‘halfway house’ combination of market and non-market that greens propose. Also, potential responses to the Austrians emerge from green thought. New light is shed upon the problem of complexity and how it might be addressed by non-market political institutions.

Notes

1. See, for example, Mises (1920), an important early contribution to the debate.

2. Points i and ii are also referred to by Zolo (1992: 126) and point iii is included in his definition of complexity (ibid.: 3).

3. Greens could argue that the tax and subsidy policies used in actually existing ‘free market’ economies, for example state subsidies of the nuclear industry, already influence environmental outcomes and so, in this sense, elements of the halfway house already exist.

4. Hayek (1960: 368) makes this point.

5. In 2005 the charge was increased to £8.

6. This is made clear in the work of Ekins & Simon (2003).

Additional information

Notes on contributors

Dan Greenwood

This paper was prepared for the Green Political Economy panel at the Political Studies Association Workshops in Political Theory, Manchester Metropolitan University, 7–9 September 2005. The author would like to thank all participants at the workshop for their comments. Particular thanks to Professor John Barry, Dr Graham Smith, and Simon Griffiths. Many thanks also to my supervisory team of Professor Paul Ekins and Professor John Keane and to two anonymous referees for their feedback on earlier drafts