The halfway house: Democracy, complexity, and the limits to markets in green political economy

Abstract

The argument of the Austrian school of economists that markets are indispensable in the face of social and economic complexity is of defining importance for the modern-day case for markets. The dominant paradigm in green political economy accepts this view, whilst proposing that markets be combined with a thick layer of democratic, non-market institutions to ensure environmental sustainability. Closer attention to the relationship between the Austrian and green arguments reveals important implications for both. The Austrian thesis raises significant challenges for the ‘halfway house’ combination of market and non-market that greens propose. Also, potential responses to the Austrians emerge from green thought. New light is shed upon the problem of complexity and how it might be addressed by non-market political institutions.