Klaassen, Ger A. J. and Johannes B. Opschoor. 1991. "Economics of sustainability or the sustainability of economics: different paradigms." Ecological Economics 4: 93-115.

Thesis:

Klaassen and Opschoor state (p. 94): "This paper examines how two paradigms, neo-classical and ecological economics, analyze the relationships between the natural environment, natural resources (hence the sustainability of the natural environment) and the possibilities for sustainable economic growth and the sustainability of economic development (welfare)."

Summary:

Premises of neo-classical economics (see p. 94-5):

the "fixed content" premise: a range of parameters are assumed to be static or given, including: institutional arrangements (in especially the economic system), preferences and needs, the state of technology and the state and functioning of the environment

the "maximization premise" on behavior: individuals and groups will try to maximize their objective function (in especially welfare for individuals, and profit for enterprises) and individual welfare judgments are the ultimate criterion

the "weighing premise" on evaluation: all relevant changes as a consequence of economic choices can be expressed in a welfare-related, one-dimensional entity, so that costs and benefits of all alternatives can be reduced to neat (ordinal) balance figures that can be ranked

Premises of ecological economics (see p. 104-5):

the "fixed context" premise is replaced by one of circular interdependence incorporating the major processes in the environment and taking into account essential biophysical laws

society may have values that deviate from (aggregated) individual values, e.g. on the basis of society's much longer life expectancy, society as a whole may thus value environmental quality more highly than individuals do

a value hierarchy exists; wants are seen as the drivers of human behavior; beyond welfare and wants, values are perceived as operators on societal and human behavior; as ultimate values "sustainability" and "environmental compatibility' are proposed; such values imply species protection and ecologically viable patterns of resource utilization.

Klaassen and Opschoor argue that the two paradigms are "complementary rather than mutually exclusive" (p. 113). Neo-classical economists better address the possibilities of economic growth while ecological economists show that economic growth must be considered within the context of biophysical and ecological laws.

Keywords: neo-classical economics, ecological economics