Economics of Sustainability: Our Approach

Summary: This page discusses how to approach sustainers. It explaints assumptions and provides an orientation.

Approaching an Economics of Sustainability

Our goal is to use the field of economics as a set of tools to promote sustainability. First and foremost, our course grounds economics within sustainability and is not intended to provide a graduate-level treatise in either environmental economics or ecological economics, as helpful and important as many of their principles can be.

My article on Economic Strategies for Sustainability, among other resources, explains what I am doing and why. Some points to consider are these:

  1. Economics provides means to support sustainability, which provides ends. The ends are defined as the well-being of Earth and of humanity, which we can regard here as the human inhabitation of the biosphere in the age of the Anthropocene. Examples of other fields that provide means for sustainability are technology, science, engineering, design, politics. Sustainers strive to understand how to apply appropriate means to the ends of sustainability.

  2. I explain that the root of both economics and ecology is the Greek term, Oikos, which defines an extended household, such as a manor in the Middle Ages or a colonial plantation. Managing the Oikos (economics) requires understanding its underlying processes (ecology). Ecology comes prior to economics and not the other way around. Add concern for the social aspects to determine a fusion of horizons, aka the Triple Bottom Line.

  3. The legacy of economic historian Karl Polanyi provides a basis to how globalization and economics can be understood to promote sustainability (Polanyi), as will be explained in class. The essential point of Polanyi is that we need a substantive economics rather than a formal treatment of economics. (The former derives from the metaphysics of Aristotle, the latter from that of Plato. See Rafael's fresco, The School of Athens.) Substantive economics embeds markets and GDP growth within nature (the biosphere) and human cultures. The magisterial three-volume historical study of the development of global capitalism, Civilization and Capitalism, by Fernand Braudel reinforces this approach. Joseph Schumpeter of the Austrian school can be placed in this school as well.

  4. The major fields of economics are micro-economics and macro-economics. Micro-economics, aka price theory, regards markets as foundational to modernity and virtually infallible, leading to the market fundamentalism of neoliberalism, the guiding paradigm of globalization. Macro-economics aims at the growth of the market-priced aggregate output of goods (and bads) and services (and dis-services) produced by what is defined (by the market) as the economy --- so much of the story is thus left out. Markets and economic growth provide a distorted and partial picture of the economy and must be analyzed in a larger context and not as abstract paradigms to be blindly applied by the uncritical faithful.

  5. Environmental economics and even the very robust field of ecological economics generally elevates economics above sustainability. Other premises include anthropomorphism and the dominant social paradigm. The analysis is therefore highly abstract and partial although still important for insight and tools of analysis. Our course is about sustainability, not ecological economics per se. In class, I will provide a brief overview of the lineage of thought in ecological economics.

  6. Economic globalization arguably undermines world sustainability and must be inverted, what I call the alchemy challenge of economic globalization. We will not delve too deeply into a critique since this exceeds the scope of the course. Instead, in Part II we move to building a strategic and empirical approach to the Economics of Sustainability.

  7. Straight ecological economics is typically delivered as a graduate course in economics, aimed at trained economists. I can't presume that the students in our class have the prerequisite background and thus would be bewildered (perhaps incredulous) by the field of environmental economics. I select and contextualize accordingly.

  8. The presentation of the Economics of Sustainability provided here will not rely on either of the predominant and conflicting economic ideologies, based on (1) the legacy of the Welfare State or (2) the market fundamentalism of Neo-liberalism. We seek a Third Way, a path toward sustainability.

Wayne Hayes, Ph.D. | Initialized: 11/02/2009 | Last Update: 10/25/2012 | V. 2.1 Build #18