Economics has frequently been defined as the science of allocation of scarce resources among alternative desirable ends. This implies a specific sequence that should be pursued in economic analysis. First and foremost, the economist must decide what ends are to be pursued. Many economists argue that decisions on ends should be left to political processes, suggesting that an essential precursor to economic analysis is in fact a democratic process that successfully articulates the desired ends. Only after determining the desired ends can the economist analyze what resources are necessary to achieve them, and which of these resources are the scarcest. The final step is allocation, via whatever institution or mechanism is most appropriate for the resources and ends in question. By concentrating almost solely on allocation via the market mechanism, conventional economics seems to invert this process. Presumably the neoclassical emphasis on allocation arises from an implicit, shared assumption that the desired end is ever-greater ‘utility’, and utility is conferred solely by material consumption of excludable and rival market goods. The market therefore serves both to reveal the desired ends through purchase decisions, and to allocate the scarce resources necessary to achieve those ends. The underlying tautology is evident: by definition, markets can reveal preferences only for market goods. Ecological economics improves on this approach. Most ecological economists consider the scarcest resource to be low entropy matter-energy in general, emphasizing the goods and services provided by intact ecosystems. Many of these goods and services are not effectively allocated by unconstrained market forces hence markets often will neither reveal nor attain the desired ends. Ecological economists also recognize that ever-greater material consumption is both undesirable and impossible on a finite planet. Further, pursuit of this unattainable goal deprives us of resources that could be used to attain other desirable ends. However, only a minority of ecological economists have focused directly on what the desirable ends are, and the complexity of the issue means that the relevant research is often somewhat abstract and academic. Yet the importance of determining a desirable end as the first step in economic analysis is becoming increasingly clear as we begin to experience the negative impacts of excessive economic growth. In the face of rapid human-induced environmental change and profound ecological and economic uncertainty, many people are worried about the well-being of their children and their children’s children. In response to this concern, governments, institutions and civil society have formed a broad, overlapping consensus around the goal of sustainable development. What is lacking is a clear unified vision of what sustainable development entails. In short, without a coherent, relatively detailed, shared vision of what a sustainable society would look like, economists (and other policy-oriented scientists) lack the clearly defined ends required to guide their efforts. Too often under these circumstances, economists fall back on the inherently unsustainable default vision of ever more rapid increases in material consumption. Democratic articulation of sustainable and desirable ends requires a shared vision detailing what we as a society want to sustain and incorporating the central shared values that express our hopes for the future. This vision must incorporate a diversity of perspectives and be based on principles of fairness and respect.
Several groups are actively working toward creating this new, shared vision of a sustainable and desirable future for humanity. This work must continue and be given the central position it deserves.
- Farley, J. and R. Costanza. 2002. Envisioning shared goals for humanity: a detailed shared vision of a sustainable and desirable USA in 2100. Ecological Economics, 43:245-259