The Flawed Paradigms of Economics and Sustainable Development
The sustainable development paradigm has failed. Ecological overshoot is accelerating and breaching the intergenerational equity criterion which requires humanity to live within safe planetary ecological limits. The equity gap between rich and poor also continues to grow wider breaching the intra-generational equity criterion.
This paper argues that the failure of the sustainable development paradigm is due to it being subsumed into the economic paradigm – a paradigm so disconnected from reality that it simply cannot address the sustainability problem. This is grounded in a failure to understand the fundamental contradiction between ecological imperatives and economic imperatives.
An overview of the way the world works ecologically followed by a brief presentation of the human evolutionary journey provides the context for the discussion. Based on this, economics is generically defined as ‘the way an animal species organises itself to obtain the necessary low entropy from it environment for it wellbeing’.
This is followed by an evaluation of the sustainable development construct and how it is addressed through the lenses of environmental and ecological economics. This leads to the conclusion that the economic system as currently designed is simply unable to deal with the sustainability problem.
An analysis of the financial system and its role in the problem is then presented and leads to the conclusion it is the inevitable structural driver of ecological overshoot and increasing inequity. An examination of the origins of economic thought and the assumptions it is based on throws some light on why the economic system fails humanity.
The final section considers how humanity might allocate the absolutely scarce resources of the planet so as to maximise the welfare of humanity while ensuring the very long term sustainability of the human enterprise.