Why Bother with Economics?
I told a friend of mine I was pursuing sustainable economics, to which she replied, “Oh, you mean spending money on green stuff.”
Her response left me with the sensation we’d just successfully lobotomized centuries of economic thought. Money is to economics, as humanity is to the sheer weight of the universe, an interesting vantage point, but, ultimately irrelevant. She did reveal, however, a peculiar vocabulary failure in modern economics, and one that has the potential to render international co-operation, and discourse, utterly mute if not accurately understood. What is sustainable economics, and does it amount to anything beyond trendy PR?
For a crash course in the cryptic nature of grasping what sustainability is, look no further than how the Global Citizens Center, the international think tank behind the South Korean International Protocol on Climate Change, assessed the issue.
“Environmentally sustainable, based on that our biosphere is a closed system with finite resources and a limited capacity for self-renewal. We depend on the Earth’s natural resources and therefore we must create an economic system that respects the integrity of ecosystems and ensures the resilience of life supporting systems.”
This is supposed to definitively lead the world to a more conscious and sound future. Yet it nearly epitomizes design by committee and reads more like a checklist for mission statement buzzwords. People are led to nod smugly rather than encourage nations to endeavor on a constructive sustainable path. Economics deal with choice under uncertainty, so to dig down to what differentiates sustainable economics, start with the foundation, choice.
According to economists humanity exists in a limited, self interested, nature. Directed by the “invisible hand,” humans act in coordination with their values. Because we are not all knowing, we make decisions that satisfy our individual values often with obnoxious unintended consequences. Over time, the choices we make and the interests we pursue begin to overlap and order evolves, which economist understand in terms of rules, incentives, actions, and outcomes.
Rules are the expectations, cultures, and traditions of people that bring about incentives. Incentives are reactions, consequences, and coercion, which civilizations promote to inspire or discourage actions. Actions are exactly that, the choices you make every minute of every day. Outcomes are simply what’s we’re left to live with, and in turn they sculpt and adapt the very rules they’re derived from. These are the functions of economics, far more fascinating than currency alone. Economic policies tinker with the incentives that construct and constrain the choices people ultimately get to make.
The outcomes sustainable economists seek are those that limit the uncertainty of the health and resilience of not only humans, but the human habitat, earth, as well. Since no one can know the epic consequences of each decision they make, sustainable economics wants to build rules that demand greater accountability, transparency, and consciousness when making choices, economic, or otherwise. The goal is a tipping point, a world-wide “dur” moment when sustainability becomes one of the rules of being human.
- Ryan Riebau
Ryan is a member of the Sustainable Business Team at the Fort Lewis College Environmental Center. He is majoring in Business Economics at Fort Lewis College.