Good Jevons, Bad Jevons: William Stanley Jevons and the Roots of Biophysical and Neoclassical Economics

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The roots of both biophysical and neoclassical economics can be found in the work of British economist William Stanley Jevons. In 1862 he presented a paper before the British Association for the Advancement of Science, arguing for a new approach to economic theory. Jevons critiqued, and sought to replace, the classical theory of value which stated that the basis of value and price was the amount of human labor embodied in a good's production. Jevons believed that value was determined in exchange, and prices reflected the underlying pursuit of utility, or satisfaction. This became subsequently known as marginal utility and the principle formed the basic premise of what was to become neoclassical economics. In 1865 Jevons produced a book entitled The Coal Question. In it he argued that the industrial revolution was, indeed, an energy revolution and energy was provided by coal. Jevons' study showed that coal deposits were becoming exhausted. He believed that the depletion of cheap and high-quality coal would spell the end of British economic and political superiority. In this work he enunciated what has become known as the Jevons Paradox: Increases in energy efficiency lead to increases in energy use. The analysis of The Coal Question forms much of the fundamentals of biophysical economics, While Jevons' major works are different and often contradictory, they share the same theory of human behavior. This is important as we strive for sustainability. Technological change and improved efficiency alone will not allow us to live well within nature's limits. We need a reordered economic system that will allow for improved well-being in the absence of economic growth in a social and economic system that is already in overshoot.