L395 Sustainable Economic Development

 It has been argued that just as earlier generations in Becky’s world invested in science and technology, education, and machines and equipment so as to bequeath to her parents’ generation the ability to achieve high income levels, they are now in turn making investments that will assure still higher living standards in the future. It has been argued as well that the historical trend in the prices of marketed natural resources, such as minerals and ores, has been so flat that there isn’t any reason for alarm. Economic growth has allowed more people to have access to potable water and enjoy better protection against water- and airborne diseases. The physical environment inside the home has improved beyond measure with economic growth: cooking in the Indian subcontinent continues to be a major cause of respiratory illnesses among women. Moreover, natural resources can be so shifted round today, that dwindling resources in one place can be met by imports from another. Intellectuals and commentators use the term ‘globalization’ to imply that location per se doesn’t matter. This optimistic view emphasizes the potential of capital accumulation and technological improvements to compensate for environmental degradation. It says that economic growth, even in the form and shape it has taken so far, is compatible with sustainable development. Which may explain why contemporary societies are obsessed with cultural survival and on the whole dismissive of any suggestion that we need to find ways to survive ecologically.

 

Broadly speaking, environmental scientists and activists hold the former view, while economists and economic commentators maintain the latter. It is no doubt banal to say that our economies are built in and on Nature, but I wonder if you noticed that the list of productive assets I drew earlier ( Chapter 1 ) didn’t include natural capital. Nature didn’t feature in our account of macroeconomic history because it doesn’t appear in official publications of the vital statistics of nations. The extraction of minerals and fossil fuels is included in modern national accounts (though not depreciated), but with the exception of agricultural land, natural capital makes very little appearance. If Nature’s services have appeared in this book so far only in passing, it is because that is how matters are in the literature on the theory and empirics of economic growth and the economics of poverty.

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