Economics of Sustainability: Factors of Production

Summary: After definition of economics, examine the factors of production: land, labor, capital. This page is incomplete and under construction.

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Introduction

Introduce land, labor, capital here from economics definition page. Sustainers should avoid depracating living entities such as land and labor, transforming them into economic objects. These concepts literally take the life out of living beings.

Factor of Production Polanyi Realms Triple Bottom Line Triple Pundit
Land Nature Ecosystems, biosphere Planet
Labor Humanity Civil society People
Capital Financial markets Business Profit

Land: Nature, the Biosphere

 

Natural Capital

Land is sometimes regarded as natural capital in the literature of ecological economics. This may create confusion, given the clear economic categories of the factors of production. Why might land appear a second time, under capital? Note the definition of natural capital by Robert Costanza, Director of the Gund Institute for Ecological Economics at the University of Portland, Oregon, appearing in encyclopedia of earth:

Natural capital is the extension of the economic notion of capital (manufactured means of production) to environmental goods and services. A functional definition of capital in general is: "a stock that yields a flow of valuable goods or services into the future". Natural capital is thus the stock of natural ecosystems that yields a flow of valuable ecosystem goods or services into the future. For example, a stock of trees or fish provides a flow of new trees or fish, a flow which can be sustainable indefinetely. Natural capital may also provide services like recycling wastes or water catchment and erosion control. Since the flow of services from ecosystems requires that they function as whole systems, the structure and diversity of the system are important components of natural capital.

Note the fiction contained in the first sentence, defining capital as "manufactured means of production." Natural capital is not manufactured as a means of producing of something else, a good or a service.

Natural capital is still an ecosystem, part of the web of life. Sustainers must be wary when nature morphs into an anthropomorphic, especially an economic, category. The transformation of the essence of an ecosystem as a bundle of human services may distract attention from its true essence as a living community. Perhaps such a linguistic device enhances our respect for the conservation of the natural capital asset, but its true essence has been forfeited. Separating the term capital from nature has the other advantage of opening up capital for a much needed critical examination.

In the Economics of Sustainability, land, whether the biosphere or component ecosystems, will be regarded as existing within nature and not as an entity that has been produced by humans for production. Yet, the field of ecological economics uses natural capital as the equivalent of the standard factor of production, land.

Labor: Humanity

Build Tasks

Polanyi on land and labor. See WWF on natural capital. Link to Land Ethic

NK belongs in the category land, not capital. The notion of nk is superfluous. See Daly. See case of Oyster Creek nucler plant at Barnegat Bay. Heats bay, producing harm. Is the bay's ability to absorb heat an example of natural capital? Cultivating bamboo provides a blend.

Examples of nk search. Note Homer article in 1996. See Sustainability concepts page on NK. This is part of Global sd research center. See ecological footprint.

Definition from business dictionary: Nature provides indispensable resources and services that are essential for human survival and economic activity. Within natural capital is commonly divided into (1) renewable resources (agricultural crops, vegetation, wild life) and (2) non-renewable resources (fossil fuels and mineral deposits).


©Wayne Hayes, Ph.D. | Initialized: 12/9/2010 | Last Update: 01/26/2011 | V. 0.2 Build #5