The interdependence of allocation, distribution, scale and stability - A comment on Herman E. Daly's vision of an economics that is efficient, just and sustainable

There is no doubt that Daly's contribution of putting scale into the centre of discussion is fundamental for ecological economics. His central and wel l-known paper 'Allocation, distribution and scale...' [Daly, H.E., 1992. Al location, distribution, and scale: towards an economics that is efficient, just, and sustainable. Ecol. Econ. 6, 185-193] is a landmark contribution. However, there are reasons for concern in respect of this paper which warra nt further considerations. The first is that the arguments are potentially ambiguous and open to misinterpretation. Daly's paper could be read as sugg esting that a strict hierarchy of goals is normatively desirable, that a ta rget planning of 'optima' is independently pssible and that trade-offs betw een the goals are of minor significance. Although Daly himself may not inte nd such interpretations, they can be mis-read into his writing, with potent ially serious consequences for the further development of ecological econom ic theory and appropriate environmental policy instruments. Secondly, the g oal of 'economic stability' is neglected in the paper. Yet, this is one of the cornerstone criteria for public policy making. It is likely that Daly c onsiders stability to be a 'meta-level' goal, which is an outcome from the achievement of several others which are considered in the paper. However, i f this is the case, it is not made clear. Thirdly, it is likely that polici es and instruments aimed at containing scale will have important effects on intragenerational distribution and on the allocative efficiency of markets . But these effects are not mentioned, although they are of crucial signifi cance for societal stability. Hence, to be most useful in the development o f a theory for economic policy, the original formulation of the arguments t hat Daly advances in his paper need to be clarified and supplemented. It is argued here that a thesis of interdependence (i.e, coevolution) of allocat ion, distribution and scale provides a means for achieving this clarificati on at the same time as offering a more adequate theoretical basis for a rat ional 'ecological economic policy' than comparative static approaches. (C) 1998 Elsevier Science B.V. All rights reserved.