Economist Herman Daly characterizes neo-classical economic theory as being analogous to a biologist trying to understand the functioning of an animal by considering only its circulatory system and ignoring its digestive system which connects the animal “firmly to the environment at both ends!” How is this analogous to neo-classical economic theory? What kind of environmental problems does this kind of neo-classical economic thinking lead to? Explain and provide examples.please type answer
Neoclassical theory fails to identify changes in environment and failure of individuals to identify positive prices of environmental goods and services. It taoes environmental degradation as loss of efficiency which is biggest downside.
Neoclassical approach leads to environmental problems like degradation and depletion of resources as in this approach determination of output is based on supply and demand and inefficient allocation of resources can lead to degradation or depletion.
Economist Herman Daly characterizes neo-classical economic theory as being analogous to a biologist trying to understand...