Chapter 10    Toward an Economics of Sustainability

If we are going to build a new and better world, we are going to have to adopt new ways of thinking about the decisions we make today – beginning with a new way of thinking about economics.  Our current economic system is designed and programmed to provide humanity with more cheap stuff.  That is all it was ever meant to do – to use the scarce resources of the earth more efficiently in giving people, as consumers, more of whatever they want.

In times past, more cheap stuff may well have been what humanity needed most.  A couple of hundred years ago many people lived lives of drudgery – many starving, freezing to death, or struggling day-to-day with pestilence and disease.  But those times are long past – at least for most of the world.  The system of competitive capitalism gave people food, clothing, and shelter and helped people lead longer, healthier lives.  But, in the process of producing more cheap stuff, it has depleted the resources – people as well as nature – upon which its future productivity must depend.  The economy also is destroying itself as it destroys human society and destroys the natural environment.  It has evolved from a system of competitive capitalism to a system of industrial corporatism – it has become a cannibalistic system for reckless resource exploitation rather than for rational resource use.  The corporatist economic system of today cannot possibly support even another fifty years of human progress.  It is destroying the very things that must be restored before humanity can take its next step forward.

We must find a new, shared vision for the future of humanity, and it must be built on a new economic foundation.  Our focus on short run, self-interest and our worship of economic materialism is a major contributor to, if not the sole cause of, nearly every major problem we face in today’s society.  Nearly every incident of environmental degradation and destruction is a consequence of our economic rationalization that the resources of the earth are ours for the taking.  Hunger and disease in the world are not consequences of a lack of food or medicine, but of our acceptance of the economic logic that only those who are willing and able to pay are deserving.  Our blind faith in free-markets has caused us to surrender both the private and public sectors of our society to corporate control.  Any positive vision for the future of humanity must be based on a new and different vision of economics, as E.F. Shumacher wrote in his book, Small is Beautiful, a vision of “Economics as if People Mattered.”[i]


By John Ikerd, from paper presented at “2000 Midwest Small Farm Conference and Trade Show,” sponsored by Sustainable Earth, Noblesville, Indiana, November 17-18, 2000.


In the summer of 1996, I was invited to present a paper at a conference on sustainable agriculture sponsored by the American Agricultural Economics Association meetings in San Antonio, Texas.  The conference organizers assigned me the topic, “Sustaining the Profitability of Agriculture.”  In thinking about how I should approach this subject, I concluded that the economy is not designed to sustain the profitability of agriculture.  In fact, our economy virtually ensured that any profits in agriculture are quickly competed away, and thus, profits from farming are inherently unsustainable.

The same would be true of any economically competitive sector of the economy.  Any expectation of profits invariable causes producers to increase production, which prevents prices from rising or causes prices to fall, and the expected profits never materialize or quickly disappear.  Today, agribusiness corporations are trying to gain control of agricultural markets so they can eliminate competition, control production, and sustain profits through market power.  But, profits for farmers, who have no market power, quite simply are not sustainable.

At the conference, I urged agricultural economists to accept the challenge of developing an economy, albeit in theory, where a reasonable level of profits could be sustained.  I wasn’t suggesting that farmers should join corporations in trying to eliminate competition, but instead that we should rethink the whole concept of a free market economy.  The discipline of economics simply doesn’t give much attention to the overall quality of life impacts of an inherent lack of sustainability of profits in a competitive economy.  In economics, profits provide the incentive for continual innovation, so we can have ever-more stuff at ever-lower prices – that’s all that seems to matter.  The fate of those who don’t survive the race to produce more and produce cheaper just doesn’t get much attention.  Some win and some lose, that’s the discipline of the marketplace, so we are told.  Neither does the economic man spend many sleepless nights worrying about what this blind pursuit of materialism does to human societies in general.  The satisfaction of consumer demand is the driving force of economic activity.  The social and ethical well-being of whole people is beyond the realm of economics.

At the meeting in San Antonio, I argued that a new economics should be developed on the foundation of sustainability; our economy would have to be ecologically sound and socially responsible in order to be economically viable over the long run.  I challenged my colleagues to break out of their myopic ways of thinking and to examine their blind faith that short-run self-interests somehow will be transformed into long-run societal well-being.  I challenged them to abandon the dogma that we had been taught in graduate school and to develop a new economics of sustainability.

My challenge brought a strong response from many in the audience.  Most were slightly shocked that an economist on a program at the AAEA conference would be so critical of the economics profession.  However, others seemed inspired by the fact that someone was willing to stand before the profession and to tell the truth about our discipline.

At lunch, the people at my table seemed ready to join my campaign for a new kind of economics.  Jim Nelson, a former colleague from Oklahoma, and I had a long conversation following lunch that day.  Jim had spent his career in resource economics – trying to find ways to minimize the negative impacts of the private economy on the natural environment.  Jim agreed with most of what I had to say, but he didn’t think we needed to develop a new economics – “the old one was not beyond repair,” he said.  I disagreed.  Jim challenged me to take the first step, to propose a new economics of sustainability – specifically, to outline a theory that wasn’t just a rehash of the old economics.

I accepted the challenge and developed a “white paper” on the subject later that year.  I sent the paper to Jim and to more than a dozen other economists who I knew were interested in economic sustainability.  I sent the paper also to non-economists who were interested in sustainability issues.  I knew if change were to come, it would not likely come through the economics profession.  Economists, in general, had too much to lose from changing their old paradigms.  I asked for reviews and comments and attempted to respond with revisions and an addendum to the paper.  Much of this chapter is rooted in my previous efforts to develop an economics of sustainability.

The concept of sustainability is far broader than economics – at least as economics it is currently conceived.  Daly and Cobb, in their book, For the Common Good, refer to the economics of today as chrematistics -- the “manipulation of property and wealth so as to maximize short-term monetary exchange value to the owner.”[ii]  Sustainability is also broader than ecology or sociology, because sustainability most certainly includes economics.  However, sustainability is quite consistent with the root-word for economics, oikonomia – meaning “management of the household (community, society, humanity, biosphere) so as to increase its value to all members over the long run.”  Oikonomia includes the management aspects of sociology and ecology as well as economics.

Daly and Cobb propose to address oikonomia through an “economics of community,” which they propose to achieve through new government policies.  However, it will take more than new public policy to implement oikonomia.  First, people must embrace this new concept of economics as a part of their contemporary culture.  They must understand and appreciate the necessity for managing society, environment, and economy, as a whole, not separately, if we are to sustain human life on earth.

Sustainability is a long run, people-centered concept.  The implicit purpose of sustainable development is to sustain a desirable quality of life for people, forever.  Granted, with our limited knowledge, we cannot conceive of being able to sustain life on earth without a continuing inflow of solar energy.  Thus, solar-based systems of production represent the current limit to our thinking with respect to means of achieving sustainability.  Perhaps in some distant post-solar era, life will be spiritual rather than physical in nature.  However, lacking any real understanding of what might happen once the sun burns out, and in the absence of any logical endpoint of time, the purpose of sustainability remains: to sustain a desirable quality of human life on earth forever.

Some find fault with this anthropocentricity or human-centered interpretation of sustainability.  They contend that other forms of life may be just as important as human life in the longer run scheme of things.  However, if we are not concerned, uniquely, with sustaining progress of the human species, there is no economic issue to be addressed.  Economics is about managing resources to meet the needs of humans.  If we weren’t particularly concerned about humans, we could simply depopulate the earth, or otherwise reduce human claims on resources, to a point where the sustainability of other species would no longer be in question, or at least not threatened by humans.

However, our nature as humans is not unlike the nature of other species, in that we humans have an innate instinct for survival, self-gratification, and reproduction.  We will not reduce our claims on earth’s resources for the sole purpose of ensuring the sustainability of other species or of the non-living elements of the earth.  But, we will protect other species and natural resources if we perceive it to be in our best interest to do so.  The fact that we are concerned uniquely with sustaining the human species does not imply that we are concerned exclusively with sustaining the human species.  Contrary to what the economics of chrematistics might imply, our best interest is not exclusively individualistic in nature.  Our interests as members of our particular societies and as members of the human race are linked with the integrity of the biosphere as a whole.  Thus, our interests may well be served best through sharing and stewardship, including preservation of other species, rather than through individualistic human greed – through oikonomia rather than chrematistics.

 I conceived the new sustainable economy as an inseparable whole, made up of three distinctive components – the personal or individual economy, the interpersonal or social economy, and the moral or ecological economy.  The three are clearly interconnected, interdependent, and inseparable, but each has distinct characteristics that warrant their separate consideration.

The ecological economy is the foundation for the other two.  People exist upon the face of the earth and cannot exist without the resources of the earth – although many have lost sight of this fact in our highly specialized, industrial economy of today.  Humans cannot live without sunlight, air, water, and soil.  Most have been reminded of the tenuous nature of our dependence on the resources of the earth by industrial pollution of our air and water.  But, we became concerned about air and water only after supplies of clean air and water became scarce.  Many people never stop to think that we are equally dependent upon the soil.  Pure air and pure water will not support life – certainly not human life.  Life requires minerals from the earth in addition to air, water, and sunlight.  All of life arises from the soil – even life that resides in the ocean.  Without the mineral and biological resources of the earth, life on earth is not possible.

Life depends on energy.  Humans obtain the energy to fuel their bodies from other living things – plants, animals, etc.  We get some energy directly from the sun and the earth, but not enough of the right kinds to support human life.  Living organisms, mostly plants, convert solar energy, soil, water, and air into energy forms that can be consumed by animals, including humans.  All energy present on the earth today was either stored in the earth at its time of creation, or has been captured from the sun and stored by living organisms.  Fossil fuels are nothing more than energy captured and stored by prehistoric plants and animals.  The only source of new energy on earth is solar energy from the sun.

Everything that takes place on earth is part of a continuous cycle of conversion of matter to energy and energy to matter – according to the first law of thermodynamics, the law of conservation of mass and energy.  But each time that energy is converted into matter or matter is converted into energy, some of its usefulness is lost – the second law of thermodynamics.  After each cycle, there is less useful matter to be converted into energy and less useful energy to be converted into new matter than before.  We humans currently are using fossil energy at a rate far faster than we are capturing new solar energy from the sun.  So, we are currently using up the resources of the earth and eventually will run out, if we don’t bring our rate of use into balance with the rate of solar energy renewal.  No one knows how long current energy supplies will last.  Ultimately, however, humanity must learn to live from the net inflow of energy from the sun or humanity will perish.

 Humans also must use the earth as a dump or a sink for our wastes, as well as a source of the energy that sustains life.  There is no place else to dump things.  When we dump waste into the environment, we are degrading or destroying its usefulness to humans – as when we pollute air or water, or when we poison the soil with chemicals or allow the soil to erode away.  Some things we dump into the environment could be reused or recycled, turning wastes into useful resources.  However, some waste is unavoidable because all matter eventually loses its usefulness – again the second law of thermodynamics.  So, we lose the use of ecological resources, both through avoidable waste and unavoidable entropy, a term for the degradation of matter and energy.

As far as we know, the first and second laws of thermodynamics cannot be repealed.  We cannot continue indefinitely to use up or degrade the resources of the earth at rates faster than their rate of regeneration.  A sustainable ecological economy must be one where our use of energy and matter, as resources and as sinks, is equal to or less than the inflow of solar energy and our reclamation of resources from the natural environment.  The laws of nature cannot be changed.  Ultimate, we must reconcile the individual and social economies with the ecological economy, if we are to sustain life, including human life, on earth.

The environmental movement has made the public aware of this ecological economy.  However, the concept of a social economy is neither well understood nor appreciated.  First, the social economy is not the macro-economy – the aggregate of individual enterprises.  The social economy addresses the interdependence of people within society – not just the adding together of individuals.  The purpose of the macro-economy is to facilitate the building of a stronger individual, private economy.  The purpose of the social economy is to facilitate the building of a stronger society – of strengthening mutually beneficial relationships among people.

Social capital is the essence of any civilized society.  Social capital includes the ability of people to relate to each other, to form families, communities, and nations, to agree on processes of governance and trade, and to share basic principles and values by which civilized people must agree to live.  Analogous to stocks of fossil energy, our current stocks of social capital have been built up over centuries by past human civilizations.  Without these social resources, we would be living in a barbaric anarchy.  Social resources are at least as important as ecological resources in supporting a desirable quality of life.

Stocks of social capital are built up through the development of human culture – the passing from one generation to the next of lessons learned through the struggles of people to achieve more peaceful, productive, and harmonious relationships.  Anything that helps us to achieve a higher quality of life through human relationships builds the stock of social resources.  Wars, battles, feuds, confrontations, arguments, destructive competition, and other forms of human conflict degrade and destroy social capital.  People who have lived in peace for centuries can become bitter enemies, as a consequence of simple misunderstandings.  Misunderstandings can lead to conflicts, conflicts to confrontations, confrontation to battles, and battles to wars.  The ability to live and work together is destroyed, social capital is depleted, and quality of life is diminished.

Stocks of social capital are inevitably depleted through ordinary acts of human incivility – people are not perfect.  This unavoidable loss of social capital is analogous to entropy in the ecological world.  Thus, social capital must be continually replenished or restocked if human relationships are to remain positive and quality of life is to be enhanced over time.  Social capital can be depleted also through deliberate acts of oppression, exploitation, discrimination, injustice, or even indifference.  Such acts became commonplace in the latter stages of American capitalism and have become rampant in our corporatist society of today.  Corporations are not human, and thus, place no value on human relationships, other that those that can be exploited for economic gain.  Corporations transform social capital into economic capital, and in so doing, destroy the social fabric of families, communities, and nations in their pursuit of profits and growth.

If human civilization is to continue to advance in the future, we must maintain and continually rebuild our stocks of social resources.  Thus, the new economy must be designed to halt the senseless depletion of social capital by corporate exploitation.  But, the new economy must also encourage and support continual social investments by encouraging mutually beneficial human relationships.  Stocks of social capital must be built at rates exceeding their natural rates of erosion, plus rates of unnecessary depletion, if human civilization is to be advanced.  This is the fundamental nature of the social economy.  The progress of human society demands that our additions to stocks of social capital consistently exceed our continuing withdrawals.

The conventional or individual economy is by far the best understood and most widely appreciated of the three economies.  It’s the only concept most people associate with the word economy.  When we go to work or go shopping, we are participating in the individual economy.  The conventional economy provides the means, by which we meet our needs as individuals, and collections of individuals, through our transactions with other people and our interactions with the natural environment.  As I have indicated before, if we lived totally independent and self-sufficient lives, we would have no need for an economy.  But our lives can be made better through specialization and trade, and thus, we need to relate to other people.  Our lives can be made better through utilization of natural resources that are beyond our personal grasp, thus we need to trade to acquire benefits from those resources to which we would not otherwise have access.

The individual economy doesn’t use ecological and social resources directly, but instead converts them into economic resources.  Ecological resources are extracted from the natural environment – through mining, logging, or farming – and are converted into marketable raw materials for manufacturing, construction, or processing.  Natural resources that were once owned in common, for the benefit all, are converted into private goods for sale to the highest bidder.  Without privatization, there would be no incentive for private investment in the resource extraction process, and nothing would be produced for sale.  Social resources are extracted from society – through employment, collaboration, or negotiation – and are converted into human resources, which make things, provide services, or make deals.  Social resources that once supported positive relationships among people are converted into labor, management, joint ventures, and commercial advantages – commodities for sale to the highest bidder.  Without privatization of these social resources, there would be no individual incentive to make deals and or invest in enterprises that employ people, and there would be no jobs in the private sector.

The macro-economy is part of the individual economy.  As pointed out previously, macroeconomics focuses on facilitating transactions among the various individual economic entities.  Macroeconomic policy plays a legitimate and important role in the function of the individual economy, however, it does nothing to sustain or support social or ecological economics.  In fact, current macroeconomic policies promote maximum economic growth, and thus, promote the degradation and depletion of both social and ecological resources.

The individual economy is an important dimension of any modern society.  The conversion of ecological and social resources into economic resources is both necessary and legitimate – if we are to live at any level above subsistent self-sufficiency, and if we are to have freedom of individual choice.  We must recognize, however, when we convert natural resources into economic resources, fewer natural resources are left to support the ecological economy.  When we take minerals from the earth, cut old-growth forests, or farm ecologically fragile soil, we are disrupting the natural ecosystem in ways that may degrade its ability to remain healthy and productive over time.

Certainly, we realize humans benefit from resource extraction, but we must recognize also that humans benefit directly from the natural environment – from breathing fresh air, drinking pure water, and from being good stewards of the air, water, and soil.  Whenever we use the conventional economy to extract from nature at rates faster than nature can regenerate; we are degrading the productivity of the ecological economy, and ultimately will degrade our overall quality of life.

We must recognize also that when we convert social resources into economic resources, fewer resources are left to support the social economy.  When we go from helping each other voluntarily to working for each other, we have transformed a personal relationship into a business arrangement.  When we start using our social contacts with other people as business connections, we have started to transform friends into business prospects and social gatherings into business conferences.  Ultimately, we will begin to compete rather than cooperate.  The means by which we relate to each other will become defined by common business practices, rules, or laws rather than by a sense of caring and common human understanding.  Certainly, humans benefit from their business relationships, but we must realize that humans also benefit from our purely social relationships – from belonging, caring, sharing, and loving.  When we use the conventional economy to extract social resources at rates faster than the rates we reinvest in society, we degrade the productivity of the social economy, and ultimately will degrade our quality of life.

An economics of sustainability must somehow integrate the individual, social, and ecological economies so as to promote harmony and balance among the three.  The three economies are inseparable dimensions of the same whole, and thus, cannot be managed separately.  We simply cannot do anything that affects one of the three economies without affecting the other two.  If we are at a point of balance or harmony, we can’t do anything that might otherwise improve the performance of one dimension without disturbing the balance, and thus, end up worse off overall than before.  If we are out of balance, we can restore balance by devoting less time and energy to the dimension that we are overdoing, actually improving overall well-being by actually doing less.  An economics of sustainability forces us to rethink the conventional wisdom that more is better and to use our common sense to find success through harmony and balance.

An element of tension or stress always exists among the economic, social, and moral dimensions of our lives – if for no other reasons than competing demand for our limited time and energy.  However, tension is not the same as conflict, and stress is not the same as distress.  Tension can be positive, in that tension is often necessary to build strength.  Similarly, tension and stress are inevitable in a sustainable economy, even when the economic, social, and moral economies are in harmony.  Tensions become conflict and stress becomes distress only when one dimension is made stronger by weakening the others.  With positive stress, the strengthening of one dimension creates a healthy tension by challenging, encouraging, and thus, strengthening the others dimensions as well.

Admittedly, the most difficult challenges in developing a sustainable economy are likely to arise from the integration of its economic, social, and ecological dimensions – in maintaining a positive, dynamic balance or harmony among the three.  A consistent means of resolving short run conflicts or contradictions must be found.  Some issues clearly are conventionally economic – the costs and benefits accrue almost exclusively to individuals.  Other issues are clearly social – individuals must build relationships and work together if rewards are to be realized.  Long-run ecological issues are fundamentally matters of ethics or morality – this generation accepts the responsibility to protect the rights of future generations as a matter of ethical or moral principle.  The challenges arise from issues that have important economic, social, and ecological characteristics – at the margins or intersections among the three.

Issues of sustainability are hierarchical, but only in a systematic sense.  The economy is a subsystem of society, which in turn is a subsystem of the natural or ecological system.  Thus, nature might seem to be dominant over society and society dominant over the economy.  However, the economy can either enhance or destroy society, which in turn can enhance or destroy the natural ecosystem.  So an interdependent relationship exists among the three – the health of each system depends upon positive relationships with the others.  Of course, nature might well survive the ravages of both the economy and our current society, but it likely would be a nature incapable of sustaining contemporary human society.

The hierarchy of sustainability arises from the source of organizational principles or rules by which the system as a whole must function.  The concept of ecology presumes there are inviolate laws of nature – a higher order of things within which all else, including human society, ultimately must find harmony.  The economy is a creation of society.  Society must set the rules by which an economy must function.  Thus, a natural hierarchy exists among ecosystems, social systems, and economic systems.  Violation of this hierarchy principle is neither impossible nor uncommon, but continual or egregious violations, quite simply, are not sustainable.

The new economics of sustainability must be built upon a foundation of an ethical and moral commitment to sustaining human civilization on earth.  We must embrace as inalienable the rights of future generations to opportunities as good as or better than our opportunities of today.  Only within this context, can we realize and sustain our social rights – to be part of a caring, sharing, civil, and productive society.  Our economic rights, in turn, can be sustained only within the context of our rights as members of a civilized human society.  The laws of nature are inviolate, and thus, must be accommodated to ensure a sustainable society.  The laws of human relationships, likewise are inviolate, and thus must be accommodated to ensure a sustainable economy.  The economic laws of supply and demand, derived from the law of diminishing returns, relate only to individual, material well-being, not to the societal well-being of people today or to the well-being of human civilization.  Thus, a sustainable economy must accommodate the natural hierarchy of individual, social, and ecological economics.  Issues of conflict thus can be resolved, at least conceptually, by relying on this natural hierarchy.  The challenge of translating this concept into reality, which will be addressed in the last chapter of this book, may prove far more difficult. 

I certainly don’t claim to have developed the blueprint for a new economics of sustainability.  I have barely scratched the surface of what ultimately needs to be done.  However, I have no doubt that a new economics of sustainability could, and hopefully will, be developed within the next few decades.  The necessary components of this new economics already exist.  We only need to put them together to form a new coherent whole.

We already have a private economy that could be fixed to pursue our individual interests, a democratic government that could be used to pursue our social interests, and a constitution that could be amended to reflect more fully our moral and ethical values.  All we need now is a shared vision to how the individual economy, the social economy, and the ecological economy should work together to support and sustain a more desirable quality of life.  We need a vision of economics as oikonomia (managing to benefit the whole) rather than chrematistics (manipulating to benefit the individual).  With this shared vision to guide us, we can begin to make the changes in the parts that will be necessary to create a new whole, a new economics of sustainability, an economics as if people mattered.

Thus far, I haven’t answered the initial question of how farmers might expect to sustain profitability in a sustainable society.  First, in a sustainable economy, neither farmers nor any other producers would be attempting to maximize profits, but rather, would be attempting to find balance among the economic, social, and ecological dimensions of their operations.  So the profits of less efficient producers, from a strictly economic perspective, would not necessarily be lost to competition from producers with lower costs.  Farmers would not feel compelled to drive their neighbors out of business, if they fully considered the negative social impacts of fewer farmers in their community and the negative ecological impacts of having fewer farmers to care for the land.  They would willingly form collaborations, with or without the help of government programs, to limit total production to levels consistent with prices necessary to maintain healthy communities and natural ecosystems, rather than attempting to maximize individual profits.

Second, public policies in a sustainable society would not allow anyone to be driven out business, if their contribution to the social and ecological well-being of their community and society more than offset any economic inefficiency.  Their neighbors, and society as a whole, would recognize their positive contribution to the overall societal well-being and would create the necessary economic environment, through public policy, to ensure their continued contribution.  Our economic policies today are designed to minimize costs by driving less efficient producers out of business.  Sustainable economic policies would ensure the economic sustainability of ecologically sound and socially responsible business operations.  However, the profits of those who fail to make a positive contribution to overall societal well-being would not be sustainable.  They would be allowed to fail.  But, profits of those farmers who do their part to ensure the sustainability of humanity would be made sustainable economically.

Decisions in a sustainable economy should be based on the true value of things – not just on economic value.  But, what is the true value of things?  This has been a nagging question in the back of my mind ever since my graduate school days.  I used to have long discussions with my fellow graduate students at the University of Missouri about market value, intrinsic value, consumer surplus, welfare economics, etc., all of which attempt to determine the value of things.  However, I was never satisfied with the outcome of those discussions.  I always argued that the true value of things was different from any of the measures of value that we discussed in economics, but I didn’t know how to explain what I meant.  I believe an economics of sustainability, ultimately, will have to address the concept of true value.

First, I do not believe it is possible to develop a single measure of true value.  The economic value of anything is a value determined by scarcity in a competitive marketplace.  Each person votes with whatever dollars they have, or can get, and the price paid by the highest bidder determines the economic value.  Economists talk about different concepts of economic value.  Things have average values, marginal values, total values, and all-or-nothing values, to name a few.  But, these are all economic values, determined by scarcity – the relationship between supply and demand – and measured in terms of dollars and cents.  And, economics provides but one means of determining the value of anything.

The social value of a thing is different from its economic value – although economists mistakenly attempt to assess social value by using economic measures.  The social value of anything must be determined by giving every participant an equal voice in the valuation process.  In a civilized society, we are all of equal inherent social worth.  For example, if we wanted to discover the value of something in the social marketplace, each person would have to be given the same number of dollars to spend so they would have an equal voice in determining the value of whatever was offered for sale.  In the real world, the nearest we come to measuring social value is through the process of buying and selling public goods and services.  In these cases, the government acts on behalf of the people, and theoretically, each person has an equal voice in influencing their purchase decisions.  Thus, we should never expect economic values to be reflected in public decisions to buy or not buy public goods or services.  Government should never be run like a business.  Economic and social values are fundamentally different.

In addition, the ethical or moral value of anything is different from its economic or social value.  The moral value of a thing cannot be determined in the marketplace or in the voting booth, but must be determined by a process of consensus.  The moral value of anything must reflect our common sense of its worth.  To determine the moral value of a thing we would have to bring people together, without money and without votes, with a commitment to agree on the relative worth of things.  They would have to reach consensus.  In all probability, they would not rank the value of diamonds as high as the value of air or the value of a sports hero or rock star as high as the value of a schoolteacher or a nurse.  I have no doubt such a group could reach a consensus concerning the ethical or moral value of things.  And, such a process ultimately must be used to determine the values of things in the long-run ecological economy.  The long run ecological value of something cannot be measured in dollars and cents nor determined by votes – it must reflect a consensus of our common sense of its worth.

So, I suppose the true value of a thing must somehow reflect the whole of its economic, its social, and its ecological or moral value to humanity.  More important, however, no single best measure of true value exists – in spite of the common practice of giving economic value priority over everything else.  In addition, no appropriate means exists for converting one type of value into another – in spite of the popular practice of converting social and ecological values into economic terms.  Finally, the maximum true value of a thing will be realized when there is balance and harmony among its economic, social, and moral values.  The search for an economics of sustainability should bring us closer to realizing the maximum, total, true value from the individual, social, and ecological economies.

This is my vision for a better future – a post-industrial society.  It is a vision of a society in which productivity and progress arise from the creativity and imagination of people, in which new organizational paradigms are based on living biological systems rather than lifeless machines.  It is visions of a society motivated by the pursuit of a more enlightened self-interest that recognizes the social and ethical as well as individual dimensions of quality of life, in which a representative democratic government is committed to the pursuit of the common good.  It is a society served by a new economic system designed to ensure the sustainability of human life on earth.  My vision for the future is that of an economy, society, and ecosystem working together, in harmony, to sustain a more desirable quality of life for all people of all times.  This, I firmly believe, would be a fundamentally better world.  I don’t have to prove that such a world would be better – it’s a matter of common sense.  This is a vision of the future worth pursuing.  This is a vision worth fighting for – a vision worthy of revolution. 




[i] Shumaker, E.F., 1973. Small if Beautiful, Economics as if People Mattered.  Bond and Briggs Ltd. London.

[ii] H.S. Daly, and J. B. Cobb. 1989. For the Common Good: Redirecting the Economy Toward Community, the Environment and Sustainable Future, Beacon, Boston, MA.