Why Sustainability Costs Money

An economy is a system by which humans turn resources into goods and services. We want these goods and services because we believe they increase our quality of life. Whether they actually do this or not, we only make goods and services because we think we want them. The reason we don’t have a neon yellow nosehair trimmer and webcam is only because an insufficent segment of our population believes having one would make their lives better.

But the basis of all economies is the extraction of resources. In fact, it is the only basis possible, because all goods are made from resources and could not be made without them. Because of this, the extraction of resources becomes the key factor in how many goods an economy can produce. So, obviously, the more resources you extract the more goods you can produce and the stronger your economy is.

The only problem with this view is that it is only correct over the short-term. Any economy based on extracting resources at an unsustainable rate is a failing economy. Unsustainable resource extraction occurs when resources are removed from an environment faster than they are reproduced in that environment. The ultimate conclusion of such a scenario can only be that eventually there would no longer be sufficient resources to maintain the economy.

Any economy extracting resources unsustainably must eventually fail, and so is a failing economy. No matter how strong it may appear in the mean time. This is a simple enough idea, but the problem is that economies are subject to Prisoner’s Dilemma. If one economy extracts resources sustainably, they could theoretically survive forever. If another economy extracts resources unsustainably, then they must fail.  But, such an economy would, in the short-term, out-compete a sustainable economy. Which is why most business leaders, politicians, and economists conclude that sustainability would cost them money and power. What they cannot or will not see is that unsustainability is very expensive as well, it costs security.

-Benjamin Shender

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2 Comments

  1. Ms. Zot Lynn Szurgot said,

    February 3, 2007 at 8:48 pm

    Good connection to Prisoner’s Dilemma, and great description of the destructive incentives built into economic competition.

    i’d like to widen our imaginations beyond “the basis of all economies is the extraction of resources”. That is true of material economies.

    What of nonmaterial economies? For instance, economies of support? Give support, get support, trade in support, rely on support for life.

    The oft-spoken “marketplace of ideas” is another nonmaterial economy.

    There may even be nonmaterial economies of spirit involving deep motivations, ancestors, totems, visions, pantheons, and Jungian archetypes, but i’d rather let my shaman speak to that than embarrass myself with a bumbling attempt.

    Even mainstream economists, the most narrow-minded people on this beleaguered planet, recognise *services* in addition to material goods.

  2. Aftermath said,

    February 5, 2007 at 7:16 pm

    There is such a thing as a service economy. But it is more accurate to refer to it as a “service sector” than as the whole of the economy. While it may be possible for there to be a pure service economy, thus far, to my knowledge, all service economies have coexisted with a material economy of some sort. Indigenous peoples did a brisk trade of goods in terms of food, tools, clothing, etc both internal to their community and between communities. Some even used money, at least between communities. Even internal to a community people provided their “share” of food with the expectation that others would provide theirs. Or some other good or service equally valuable. Food and the providing of food served as the basis of these economies. After all, people do not do well without food. And the common providing of food provided much of the interdependence needed to maintain a community in the presence of jerks. And food comes to use as a natural resource we extract.

    So, I tend to think in terms of a service sector over a service economy. It doesn’t get much more fundamental than food, and food only comes from the environment.

    -Benjamin Shender


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