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Given the present commitment of the developed countries according to the Kyoto Pro- tocol, most published scenarios demonstrate that global greenhouse gases concentrations would not be stabilized at any level. In order to stabilize these concentrations, a deeper global involvement is needed. Taking Israel as an example of a 'recently-developed' country, we assess the role that such countries could play by assuming voluntary commitments in strengthening global involvement. This case as a model may encourage a global scheme for curbing carbon emissions, in which the more developed countries assume a stronger role and the less developed countries participate according to the principle of common but differentiated responsibility. The scheme builds on the inverse relation that exists between the per capita gross domestic product and the rate of increase of emissions due to economic growth. According to this theoretical scheme, the voluntary commitments assumed by the 'recently-developed' countries encourage the more developed countries to deepen their involvement by assuming more stringent reductions of emissions at home and transferring technological and financial means to the less developed countries. The proposed scheme would enable non-Annex I countries, both 'recently-developed' countries and less developed countries, to participate much earlier in the net mitigation of greenhouse gases.

The declared aim of the Israeli government, since 1996, was to reduce radically the presence in Israel of foreign overseas workers within five years. This aim has not been achieved due to a counteracting policy: yielding to strong political pressure, the government introduced regulations that virtually indentured legal overseas foreign workers indefinitely to their employers. This depressed their wages and transformed their employment into a source of easy gains, greatly increasing the demand for them and encouraging legal workers to turn illegal. As a result, their numbers have not declined significantly, even though the Israeli economy has been on a downtrend, most of the time, since 1997.

This paper presents a critique of the neoclassical view of the optimal use of renewable resources and offers an alternative view based on the method of classical thermodynamics. The presentation is forwarded via the issue of harvesting to extinction. Based on simple models, the traditional theory suggests that society would benefit from wiping out any renewable resource whose intrinsic growth rate, though positive, is smaller than the social rate of time preference. The latter is the rate society is using to discount its future benefits and costs. To bypass this ecologically implausible outcome, the simplistic assumptions have been modified in various ways. For example, either the costs or the benefits of harvesting have been made to depend on the stock of the resource as well as on the yield. The modifications offered make society less prone to wipe out resources intentionally, but they still disregard a more fundamental difficulty: The traditional theory is not consistent with the second law of thermodynamics; it describes a process that defies the second law, which no known system is able to be undergoing. No doubt, the theory should be challenged first and foremost on this ground, but none of the offered modifications is capable of annulling this inconsistency. A deeper change is needed because the social values of the resource as perceived by a society that behaves in manners consistent with the second law and as defined by the traditional theory necessarily differ. The paper identifies the socially consistent value and shows that harvesting to extinction is never optimal socially. Were society to follow the socially inconsistent value, it would always underestimate the importance of self-sustained resources. However, the unlikely refutability of the second law turns this possibility and the socially favored extinctions into arguable outcomes of an untenable theory rather than undesirable outcomes of a sound theory. Potentially growing renewable resources are wiped out in real life for various reasons, but when they are preyed to extinction, their unfortunate fate is an outcome of the dynamics of a socially unregulated system rather than a social objective coming to fruition.

A basic assumption of neoclassical macroeconomic theory is that in a market economy, consumers choose bundles of goods to maximize their budget-constrained utilities. A direct conclusion of this assumption is that in picking up their optimal bundles, consumers set their marginal utilities in proportion to the market prices of the goods consumed. In this paper, we show this type of behavior to contradict any behavioral pattern that is consistent with the second law of thermodynamics. This makes the “neoclassical consumer” the only system so far known to be able to evade the governance of this law. Should real consumers behave in agreement with the second law, their demands cannot satisfy the proportionality condition, and their marginal utilities cannot be determined solely by the prices. Since no real system has been found to violate the second law, and it is unlikely that one will ever be found, the need to revise consumer theory is there, even if empirically it has not yet been tested and refuted. JEL Classification: B41, D11

This study investigated selected cultural influences on probabilistic thinking of 11–12-year-old children in England. Language, beliefs and experience are shown to influence the children's “informal knowledge” of probability, i.e., the intuitive knowledge they bring to school and use in thinking about probabilistic situations presented in school. Some of the pupils' responses in interviews and in a questionnaire were consistent with the “outcome approach” and with the use of certain heuristics: “representativeness”; “availability”; “equiprobability.” A significant proportion of pupils revealed superstitions. Standard “random devices” such as dice were regarded by some children as subject to personal, religious or causative influences. In a comparison between two culturally-contrasted subgroups in the same school, we found significant differences in scores on probability tests, even when taking account of numerical and non-verbal ability. But the differences between the two groups could almost entirely be explained by differences in language ability.

Economic theory has always maintained that real economic value is generated solely within the economy where it is also completely distributed before being consumed. This view suggests that the economy operates as an economically closed system that requires no flows to pass across its boundaries in support of its steady state (‘general equilibrium’). From a thermodynamic point of view, this idea is unacceptable. An open system, which allows flows of matter and energy to cross its boundaries, is able to maintain itself in steady state only because it ‘transports’ real value to restore the value that has been ‘consumed’ within the system and dissipated. Drawing on the analogy with thermodynamics, this paper replaces the traditional systemic analog of the economy, which is the closed ‘circular flow’ process, with the steady flow process. This analog suggests that the economy is an open system both physically and economically that requires the flow of net real economic value to maintain its steady state. This economy is shown to satisfy, without reservations, the principles of the Bohm-Bawerk theory of capital. Because the behavior of the economy that is predicted by the two alternative viewpoints is different, the observed variables of the economy may be compared with the predicted ones to address a central question for the study of optimal resource allocations: Does human welfare dissipate and need to be restored or can it be fully recovered within the economy? Although empirical evidence is needed to answer this question, the theory demonstrates that the welfare function of any efficient system assigns the inflows and outflows with nonzero real values. Hence, an economically closed system is inefficient. Thus, if empirical evidence shows the economy to behave efficiently, parts of traditional economic theory, especially those based on the assumption that in equilibrium real values and exchange prices are proportional, will have to be modified.

Welfare is a measure of the well-being of society. It is sustainable if it can be maintained steadily for many years. According to neoclassical economic theory, value—that is, the flow of welfare attributed to the totality of available outputs—is generated, distributed, and consumed solely within the economy. When environmental externalities are absent, or after they have been internalized, environment-derived welfare is constant, and no environmental costs need be incurred to sustain economy-derived welfare. Hence, resource accumulation and technological progress enable society to experience sustainable development futures where its welfare always increases, possibly exponentially. Thermodynamics generates an alternative theory of value. Drawing on this theory, I show that the sum of the economy-derived and environment-derived welfare is not affected by the location of the boundaries between the economy and the environment. Hence, to recognize their contribution to welfare, environmental resources need not be internalized into the economy. According to thermodynamics-based theory, economy-derived welfare may be sustained only because the economy is able to transport net value from its environment to restore the value that is necessarily consumed within it. Hence, the environmental costs of sustaining welfare are always positive. They increase with the welfare to be sustained and decrease as a consequence of technological advance. Since part of these costs will never disappear, the room for better technologies cannot be exhausted. Once solar power is fully utilized, future increase of welfare will be guided by the rate of adoption of more efficient technologies that slow down the economic process. Although welfare is bounded asymptotically and its steady growth is precluded, economy-derived welfare and the corresponding environmental costs are determined by social decisions rather than by immutable laws of nature.

Economic theory has always maintained that economic value is “generated” solely within the economy where it is fully distributed among the factors of production before being “consumed”. According to this theory, the economy is an isolated system that does not need flows to pass across its boundaries in support of its steady state (“general equilibrium”). From a thermodynamic point of view this idea is unacceptable. According to thermodynamic theory, any open system, which allows flows of matter and energy to cross its boundaries, is capable of maintaining itself in steady state only because it “transport” value from its environment to restore the value that has been “consumed” within the system and dissipated. Drawing on the analogy with thermodynamics, this paper replaces the traditional systemic analog of the economy, which is the closed “circular flow” process, with the steady flow process. According to this analog, any efficient economy is an open system both physically and economically requiring a “flow” of economic value to maintain its steady state. In other words, an economically isolated system has to be inefficient and is bound to misallocate and overuse environmental resources. Whether the economy behaves as an economically isolated (inefficient) or open (efficient) system is an empirical question. However, if real economies are economically open and efficient, and environmental resources are abused due to the economy's unrestrained material growth, parts of traditional economic theory, espicially those related to benefit evaluation, will have to be modified. Policy recommendations will be affected in any case because internalization, the panacea of resource misallocations, cannot be more than a temporary solution. Instead of opening the economy, internalization encloses the harmed resource and saves it by abusing excessively other environmental resources.

The paper describes a policy tool capable of solving and evaluating cost-effective policies for the optimal allocation of a region's air-shed resources among competing pollution sources. It is designed specifically to evaluate the economic implications of changes in ambient air-quality standards, the use of alternative abatement technologies or different pollution control approaches. The highly-polluted air-shed of the metropolitan region of the Haifa Bay area in northern Israel has been selected for testing the usefulness of the model. The policy analysis tool is a PC software package. It is flexible, user-friendly planning model for evaluating alternative scenarios involving changes in policy parameters. It consists of an optimization module (a mixed integer programming model), a pollution dispersion module and an interface module, which connects these two modules together, and serves as an interface between them and the user, via a sequence of menu screens.

The health and integrity of an ecosystem is a multifaceted concept. It can become operational and of use in setting environmental policies once it is backed up by a theory that explicates the basic mechanisms of ecosystem functioning in response to stress. Despite the fact that ecosystem health remains a theoretical construct, the theory proposes a set of observed variables, basically the biotic stocks and flows of the ecosystem, empowered by a computable model, that give rise to operational and diagnostic measures of ecosystem health. The proposed measures are shown to correlate well with several other qualitative and quantitative measures of ecosystem health.

A simple model of the allocation of biomass in annual plants to vegetative and reproductive growth is presented. The model is shown to generate testable hypotheses with respect to several characteristic features of annual plants growing in various environmental situations. Among the features examined are the timing of reproduction, the size of the mature vegetative body, and the annual yield of seeds. A “bang-bang” growth strategy is optimal in stochastic environments if natural selection acts to maximize the expected annual yield of seeds. Given this strategy plants follow the “most rapid approach path” to an optimal vegetative body, and they initiate reproductive growth once this mature body is reached. The size of the mature body depends on the environment, and the study expounds this dependency. If natural selection acts to maximize the expected annual rate of growth, which is equivalent to maximizing the expected value of the logarithm of the annual yield of seeds, a “bang-bang” growth plan is not likely to result in random environments. The optimal plan is graded. It is comprised of rather long and continuous period of allocating biomass to reproductive and vegetative growth simultaneously. This plan degenerates into a “bang-bang” plan in deterministic environments. Though the logarithmic plan is inferior in terms of expected annual yield, it is superior in terms of lower variance and susceptibility to probable extinction.

There is probably a new law in sociology that claims that the smaller the differences between contending parties in an election, the louder the battle cries, the more ferocious the mutual recriminations, and the more meaningless the promises made by any of them.This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

The former German Democratic Republic (GDR) was generally regarded as the most economically developed and politically stable country of Eastern Europe. While I was often struck by the tragedies of the GDR during my Fulbright Lectureship at Humboldt University in 1988-1989, I also felt that it had a tremendous potential if it could somehow achieve a genuine socialist democracy. Despite the enthusiasm of many GDR citizens for developments in the Soviet Union, particularly glasnost, the Socialist Unity Party (SED) elites systematically tried to suppress their impact. Many East Germans asked, "Where is our Gorbachev?" and looked forward to the day when a more youthful, reform-minded leadership would work for socialism with a human face. While many GDR citizens expressed their dissent by retreating into a private world, others whom I met hoped for and struggled to create a socialist society. None of them expected that the GDR would move toward reunification with the Federal Republic of Germany (FRG) about a year later, although many hoped the Wall would be dismantled.This article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

This study presents some of our main findings on the structure of environmental research in Israel. These findings are: first, the government is dominant in supporting environmental research, but most studies are conducted within university premises; second, no indications exist to support the claim that environmental research is interdisciplinary. If it is asserted that policy-oriented environmental research ought to be inter-disciplinary, a need for a novel strategy for conducting and organizing environmental research is observed. Science policy makers in other countries face similar problems. Thus, our proposed organizational change has general applications. This proposal intertwines research and policy making by establishing a university-based research center for the study of environmental resources. The proposed center will be funded primarily by governmental bodies and respond to policy needs. It will be unique, however, in that from time to time its staff will have to undertake policy assignments besides common research activities. Implementation of this proposal will improve communication between scientists and decision makers, thus enhancing the role of environmental research in the policy-making process.

This article contends that an explanation of the biological emergence and preservation of the phenomenon of altruism requires an inspection of the simultaneous operation of forces on more than one level of organization. The scope of individualistic interactions must be extended to include the struggles between communities themselves in addition to the struggle of individuals within isolated communities. In light of our observation that altruistic characters are not necessarily preserved by the differential reproduction and survival of communities, a mechanism relying on the continuous change in the properties and composition of existing communities is proposed. This change is intensified by the migration of altruists to new lands whenever conditions within existing communities severely deteriorate. The suggested mechanism, moreoever, eliminates the need to postulate group selection mechanisms to account for the survival of altruistic characters. The article discusses the well known Kantian argument, which maintains that it is reasonable to obey moral commands by showing that the moralistic approach is based on evolutionary grounds. To act altruistically is presumed to be irrational only when the shortsighted egoistic view is taken as a point of reference. Thus it is shown that moral principles are not confined to human populations, but are widespread over the biological world where they may be genetically coded and culturally reinforced. This observation suggests, furthermore, that abstract compensations do not constitute a general incentive scheme capable of explaining why altruism has not become extinct. If survival is endangered, an abstract incentive cannot constitute a compensation for an altruistic act if it is unaccompanied by higher reproduction rates. The biological roots of altruism then have to be found in the relative competitive advantage shared by members of a cohesively maintained altruistic community. In such a community, the maxims of the members become universal laws thus enabling individuals to effectively devote their time and energy to specialized expansion of their resource base instead of wasting dear resources in sterile struggles.

This article examines the competitive exclusion principle, which states roughly that two sympatric species, having identical ecological niches, cannot co-exist in a stable equilibrium. The validity of the competitive exclusion principle is questioned and discussed by depicting an analogy between ecological and economic entities. It has already been pointed out that the concept of the niche should be defined independently of the principle, since otherwise the principle cannot be verified. Ecological literature has not yet provided adequate definitions of the concept of the niche; most definitions do not bother to distinguish sharply between functional and spatial characteristics of the ecosystem on the one hand, and species' characteristics on the other hand. In order to be useful in analyzing the competitive exclusion principle, the definition of the niche cannot be too narrow, since it is clear that no two organisms can concurrently occupy the same spot, or too broad, since it is well known that two sympatric species can co-exist in a stable equilibrium. Therefore, it becomes meaningful to consider the limits of co-existence and to examine those definitions of the niche and permissible competitive interactions for which the principle is valid. Roughly speaking, we suggest that investigating the validity of the competitive exclusion principle is similar to asking whether two different economic institutions, having different technologies, can co-exist stably in a given market structure. We construct a simple competitive system, in which markets are required to clear instantaneously, and the process of entry and exit of the individual components is governed by realized profits. It is shown that an unstable co-existence of different technologies results. It may be proposed that the quick adjustment process, to be carried out in the market and analogously in the ecosystem, is responsible for this result. Consequently, it is shown that a similar system, whose growth occurs only intermittently, is also unstable. This is interpreted to mean that reasons for instability should not be looked for in those aspects of the ecosystem which, in their tendency to affect ecological populations, exert forces external to the growth processitself. Stable co-existence is shown to occur when growth is intrinsically bounded. This is achieved by making production opportunities of each and every individual sensitive to ecosystem parameters. Thus, to enable stable co-existence it is not enough that population size will be regulated by relative densities. These densities should rather work in a very specific manner, which allow them to control growth and hence population size by intimately affecting the population equilibrium phenotypes.

This article considers and analyzes the properties of some types of equilibria in ecological systems. The approach adopted here attempts to trace traditional methods of equilibrium analysis in economics and as a result many attributes of the equilibrium state in ecology are enriched with new concepts, borrowed from the behavioral sciences and from classical thermodynamics. We propose that a comparative study of economics and ecological systems would show that the first is not a qualitatively novel entity, but rather a natural continuation of ecological systems, to be constructed around the same principles, driving motives and laws in action. Obviously many common processes are incomparably intensified in economic systems, but this is not to say that the organization of exosomatic production and exchange are more sophisticated and elaborated than those of endosomatic processes. We develop and rely on a view which states that some common principles operating in nature give rise to many observed phenomena in the social and the natural sciences. This view permits and validates the method of reasoning by analogy to explain various phenomena, which occur at different organizational levels, within a given population or among different populations. The method of reasoning by analogy is extended in this article far beyond the analysis of individual behavior. A general system, composed of various populations, is constructed and its basic processes of production, consumption and exchange are rigorously analyzed. It is shown that material transfers can and should be viewed as multilateral exchange transactions. An equilibrium state of such a system is intimately followed from these transactions, when they are carried out at fixed exchange ratios. In dealing with systems composed of various interacting populations in a given abiotic environment, it is argued that a Nash equilibrium is the most plausible concept of equilibrium among the various steady states. The concept of ecological prices is developed by integrating the thermodynamic method, according to which prices emerge as the system's intensive variables, and the economic approach, according to which prices express the ratios which determine the transfers of commodities. The coevolution of various populations or the evolution of ecosystems is seen to be a process of specialization, dependency and exchange. No doubt that a generalized, transaction-dependent price system could be defined for this process, but the evolutionary process is certainly not an equilibrium process. Therefore, prices should not be expected to remain constant in time or homogeneous in space. We also include in the article a short discussion of the limitations and short-comings of equilibrium analysis, whose disadvantages mainly stem from the fact that genetical mutations and other inventions cannot be accommodated in the model in a realistic way, since they interfere with the equilibrium state. To allow the existence of an equilibrium state, the model is necessarily rigid. This problem is particularly prominent when a formal model is presented and analyzed. However, this method of analyzing equilibria is not without value and remains a cornerstone in the analytic study of real world, evolutionary phenomena. Since trends cannot be concisely and rigorously differentiated and formulated, the study of moving equilibria, which naturally extends from equilibrium analysis, constitutes the only challenging, albeit imprecise method in the formal investigations of evolutionary processes. The equilibrium developed here is characterized by equal treatment of constituent populations which, together with the price system emerging from it, form vital elements in the establishment of a new philosophy of ecological planning. This philosophy thoroughly differs from the anthropocentric programme, which implicitly maintains that human actions which deliberately affect the surrounding environment may save mankind the need to adapt itself to new situations. Thus, the price system, which emerges within an integrated system during the quasistatic process and traces nothing but some of the system's equilibria, is highly important in evaluating policies for the management of the environment. A moving price system serves a crucial role in the analysis of evolutionary programs, which characteristically lack price systems of their own. But from a practical point of view, evolutionary movements may require supplementary measures or viability analysis to keep the behaviour of the system within specified boundaries.

Ecological prices and other system-wide, quantitative descriptors of ecosystem functioning are derived from the assumption that ecosystems allocate available resources efficiently among their components. However, ecological prices are not efficiency prices only, and using them does not require one to assume that the ecosystem is completely controlled by Man. The same prices balance flows of different biomasses in a multicomponent system. As such they play the role of exchange prices in a decentralized ecosystem. Properly defined with the help of ecological prices, the resulting ecosystem productivity is no less a significant indicator of ecosystem functioning than the national product is significant for assessing the functioning of an economy. Considerations of the values taken simultaneously by our proposed indicators and by their economic analogs are of much help in judging the desirability of projects with relatively mild environmental repercussions. These values are obtained from an integrated model of a system in which ecological and economic activities are intertwined. However, for the indicators to have an analytical meaning, the methodology should be applied to trace only those dynamic paths during which the system possesses unique, state-dependent, intensive properties. In other cases, a more comprehensive methodology - one which also pays due regard to the viability of the ecosystem - must supplement the analytical approach. This rather comprehensive methodology is scale-dependent and probabilistic in nature. While delineating relations between the structure of the system and its behavior, this method implies that efficiency and viability are two complementary rather than two commensurate attributes of a single entity. An outside observer may be guided by his own values in his attempts to weigh these features, but no inherent property of the system exists that supports his values unequivocally. Nevertheless, this paper proposes an approximation to overcome this difficulty and to estimate a quantitative limit to the rate of substitution between productivity and viability. Such a limit is also an intensive property of the simulated system, and the estimation of its value is shown to be crucial for studying the vulnerability of real ecosystems to severe Man-made disturbances.