The Spaceman and the Cowboy economies of Kenneth Boulding

Kenneth Boulding's famous 1966 paper The Economics of the Coming Spaceship Earth presented the idea of the Earth as a zone of finite resources. That is, as a spaceship. His ideas could be illustrated using a systems diagram (left), which provides a good introduction to modeling in general.

For this introduction I used the systems diagram of the Simulistics program (simulistics.com) and Odum and Odum's model for a renewable resource that appears in the book Modeling for All Scales (2000, Academic Press).

One can see why this model describes a population inside spaceship: the resource R is being supplied at a fixed rate but is being drained at a rate proportional to the size of the population. On the other hand, by removing the outflow from R one can turn this into a cowboy economy, that is, a land vast and rich where "seldom is heard a discouraging word".

The cowboy economy corresponds more to the way we think, but the above model is the way “reality” is. Boulding gave two recommendations how we can make our world more like the spaceman economy it should be.

First, lessen consumption rate. Consumption may be described as disposal minus recycling. Thus, one way to decrease consumption rate is to increase recycling. Another is to lessen supply (like toilet paper, when its supply is low disposal rate is low). And another is to increase prices.

Second, increase the stock of R. This may be brought about through technology, such as genetic engineering, which can draw the maximum from nature. Another is to simply plant more.

But what Boulding is really saying goes bigger than all that. He is asking no less than we change the way we study and do economics. He says that we should shift from an emphasis on production (measured by GDP and GNP) and instead shift to measures of stock. One way this can come about is to value intellectual creations, such as technology.

One insight from all this is that mathematics is a language. The diagram above is a model, and so is its mathematical formulation, written as a system of differential equations. Mathematics is a language that allows one to communicate with the computer. It is a motivation to understand that it is a language that allows us to communicate with some of the most powerful tools created by man, computers. It is a universal language, one that can be used to interrogate nature itself. "How are you, tree?" is not a question nature can answer, though it could answer this: "How is your oxygen production rate today?"

We just have to realize that like all languages, mathematics can not express the full reality of things. It remains useful to understand aspects of these realities, however.