In early ran November, 70 Harvard University students of their introductory economics class. She wrote to professor Gregory Mankiw that the biased nature of its course "perpetuates problematic and inefficient systems of economic inequality in our society." Mankiw is the author of Principles of Economics, the a textbook used by almost every student general economy in the Western world.
The strike was part of a larger event organized by Boston's Occupy protest, and echoed a key element for the worldwide Occupy movement. As these students and demonstrators, I've been thinking about our dysfunctional economic paradigm. I share the concern that we sacrifice too much to a system driven by three fallacies: that well-being can only be measured in money, that distribution doesn't matter, and that the economy can grow forever. And so a lot of people today, I wonder if our economic system at the service of the goals that are important for the society. After all, is an economy a means to prosperity, not the end.
This economic system is relatively new. World leaders had in the 1930s and 1940s, to tackle unemployment and features summary. Many of our current economic measures were when natural capital (the benefits provided by nature) was abundant but built capital (buildings, machinery, infrastructure) was not developed. In providing more manufactured goods and services, we developed a blind spot on the economic importance of natural systems. Labour, built, and financial capital are generally considered to be the primary factors of production for economic development. Country and natural systems are rarely recorded.
With increasing human populations and profit-driven, consumer-based economy, more land is eaten by development, habitat is destroyed and degraded, and resources on non-sustainable exploitation levels. Natural capital is disappearing.
For example, salmon were abundant on B.C. the west coast in 1900. Built more capital, such as nets and boats, was needed to harvest them for food. By 2000, there were no shortages of nets and boats, but the fish and the habitat they need to survive had become scarce. If natural capital and the goods and services have declined, increased interest in this area of the economy.
Starting to recognize economists are also that human welfare depending more than having manufactured products. A large amount of research shows that things such as free time, equality and healthy relationships are important to people's happiness than larger consumption. This starts to change our economic models.
But we still have to go far. The services of the nature and the qualities that contribute to human well-being are still invisible in the market. Because we have exalted above all, is this dangerous economy. When you a society largely quality of life with economic indicators such as gross domestic product comes down, and that indicators are not tracking the health of its fundamental inputs, eventually you on shaky ground.
How we tackle this? A tool is natural capital appreciation. Put a price on nature of services is a complicated topic. Although nature is worth the full non-quantifiable, her unmistakably ecosystems services provide society that have real, tangible economic weight. For example, wetlands filtering water and reducing natural disasters, such as floods, and forests manage runoff and habitat provide pollinators.
By the value of the visible nature, decision-makers take into account the real benefits and costs of conservation and restoration. These economic benefits even have the attention of the world bank plans to help countries , tracking of natural capital assets and including them in development plans, in the same way that we track other wealth with the GDP index. And, more recently, the advocates former Canadian Prime Minister Paul Martin has natural capital in national accounts including.
These measures will not completely change our current economic paradigms, but they could at least delay the rampant environmental devastation and the resulting effects on human health and well-being, that symptoms of our profit-driven corporate economies. They can also help us think about what we really need to be healthy and happy as people, and to see the trade-offs inherent in our activities. Until we do this, we cannot hope to address inequalities, the students and protesters Occupy his rally against.
Written with contributions from David Suzuki Foundation environmental economist and policy analyst Michelle Molnar.
Photo courtesy of Compfight.
