Natural resources in the theory of production: the Georgescu-Roegen/Daly versus Solow/Stiglitz controversy
CIRED congratulates Quentin Couix, winner of the 2021 Gilles Dostaler Prize of the European Society for the History of Economic Thought for the best article by a young researcher.
Abstract
This paper provides a theoretical and methodological account of an important controversy between neoclassical resource economics and ecological economics from the early 1970s to the end of the 1990s. It shows that the assumption of unbounded resource productivity in the work of Solow and Stiglitz–and the related concepts of substitution and technical progress–rest on a model-based methodology. On the other hand, Georgescu-Roegen’s assumption of thermodynamic limits to production, later revived by Daly, comes from a methodology of interdisciplinary consistency. I conclude that neither side provided a definitive proof of its own claim because both face important conceptual issues.