Economist Herman Daly characterizes neo-classical economic theory as being analogous to a biologist trying to understand the functioning of an animal by considering only its circulatory system and ignoring its digestive system which connects the animal “firmly to the environment at both ends!” How is this analogous to neo-classical economic theory? What kind of environmental problems does this kind of neo-classical economic thinking lead to? Explain and provide examples.

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The analogy made by economist Herman Daly regarding neoclassical economic theory compares it to a biologist studying an animal solely by focusing on its circulatory system while ignoring its digestive ... View the full answer