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Abstract: Classical economic theory, represented by Adam Smith, David Ricardo, John Stuart Mill and Karl Marx, has conceived the economy as a circular process. From the end of the 19th century to the present a different approach has dominated economic thought, which is named marginalism or neoclassical theory. In the neoclassical conception the economy is a one-way street from „factors of production“ to consumer goods to waste. This change in economic theory reflects the ever growing input of non-renewable resources and output of waste which is not recycled. The founders of „Ecological Economy“ such as Herman Daly have identified some defects of the neoclassical theory, but they adopted its basic assumptions. The work of Piero Sraffa (1898-1983), which is a revival and extension of classical theory, offers a totally different framework for ecological economy. Although the word „sustainable“ does not appear in his writings, he shows how the requirement of sustainability determines prices. Here, his theory is applied to the recycling of iron scrap, to carbon dioxide emission and absorption, and to the question, how a steady-state economy with full employment is possible.
Key words: Ecological Economics, History of economic theory, Recycling, Climate protection, Steady-state economy