Those 18th Century heroes of the Enlightenment, the vanguard exponents of our notions of reason and empiricism, the natural philosophers, spoke of the "economy" of the various species they observed and recorded. Whether this habit reflected a deep understanding of the workings of nature or was just a quaint turn of phrase, it remains an entirely apt perspective of the natural world.

Nature is the quintessential free market economy. The survival of the fittest is no metaphor. There is no welfare safety net, no Federal Reserve to rescue the inept and corrupt from their folly. Failure and even modest under-performance can have only one result.

Like its pale human imitations, the real world economy transacts its business with a variety of currencies.

Its Universal gold standard is of course energy, but other more terrestrial currencies are also vital for running a biospherical enterprise. Water, air in the right proportions, carbon and intellectual property (biodiversity, alias DNA) are all necessary components for successful economic management.

Nature is the ultimate economic rationalist. It is wholly unsentimental, ruthless and free of corruption and political subversion in the rigor of its execution of the principles of market economics. Unlike the human dilettantes who practice their dismal pseudo-science, nature does not cherry pick what it wants to include in its equations of efficiency. Its algorithms are all embracing; its computational power infinite. Predicting the effect of the flap of an Amazonian butterfly wing on the futures market for Australasian sea-turtle eggs is nothing to Nature. It literally has a brain the size of a planet.

By contrast, human economists, with some laudable exceptions, have chosen to ignore the rather obvious fact that an economic system that cannot distinguish real-world capital from income, environmental overhead from current expenditure and ecological profit from loss, is badly in need of some T&D.

Global heating has at long last provoked a debate about pricing the environmental costs of carbon dioxide emissions into the economic equation. It is a small first step towards an awareness that sooner or later we must account for the environmental costs of everything we consume, and have consumed, during these past several centuries.

This awareness is also beginning to extend to our use of water and its value, not just to immediate human needs but to the equally important needs of the whole of the environment that sustains us.

In economic terms, high rates of growth since the industrial revolution have fuelled runaway inflation of the only currencies that truly matter and they have become so debased that they are in imminent danger of collapsing.

What can we do about this? The simplest solution is to do nothing and let nature?s economics run its course. After all, life on earth has seen plenty of booms and busts. Perhaps we should resign ourselves to the bio-business cycle and follow the dinosaurs to that great dole queue in the sky.

Alternatively, we could take on the role of a central bank and devise an interventionist policy. But what sort of economic policy would be most appropriate? Monetarism has never been much good for dealing with this sort of terminal stagflation, nor fiscal policy, which tends to result in the difficult political process of picking winners and losers.

Maybe an economic philosophy totally predicated on the sadly irrational assumption of perpetual economic growth in a finite biosphere is not the best muse for inspiring solutions to our problems. Perhaps we should look to an economic system with a rather better track record, one with a computer the size of a planet at its disposal.

How would Nature rationalise water allocation in the Murray-Darling Basin. Would it attempt a sentimental, but in all probability, futile attempt to save a few favoured species, or would it apply a coldly rational ecological triage system and utilise the rapidly declining water resource to maximise the structural integrity of its ecosystems. That is, components such as broad acre soil biodiversity and carbon content, connectivity between remnant habitats, fire control etc etc.

This sort of ruthless cost benefit assessment must be the result of an empirical analysis based on the broadest possible terms of reference and not predicated on the emotional or economic priorities of sectional interests. The science must be transparent and available for appropriate peer review and must not expect to persuade by a repetition of that pregnant phrase so loved by governments, "trust us". We did that already, and the experience has left the balance of our trust account in a parlous state, or should that read "States", indeed.

A.D. Dickson

10th September 2008