GEOG 352: Final Day

1. GEOG 352: Final Day Final Synthesis & Review

2. Housekeeping Items • Today is our last class. I will hand back what work I have. The other stuff is trickling in. • I’ve really enjoyed this class – despite the strike. It’s been my favourite, and I hope to see some of you again. • Today, we will do a brief synthesis and review.

3. Principles of Mainstream Economics(courtesy of Raimo) • People face trade-offs. • The cost of something is what you give away to get it. • Rational people think at the margin. • People respond to incentives. • Trade can make everyone better off. • Markets are usually a good way to organize • economic activity. • Governments can sometimes improve market outcomes (not all economists agree with this or differ on the how). • A country's living standards depend on its ability to produce goods and services. • Prices rise when government prints too much money. • Society faces a short-term trade-off between inflation and unemployment.

4. Assumptions of Mainstream Economics • that humans are utility-maximizing individuals • that self-interest (the “invisible hand”) tends to lead to an automatic increase in social well-being • on a grander scale, that pursuit of 'comparative advantage' and increased trade leads to a rise in global well-being • that 'economic efficiency’ tends to lead to enhanced social well-being • that when natural capital is depleted, other forms of capital can be substituted for it – i.e. technology will come to the rescue • All of these assumptions have tended to be bundled up in the notion that progress is associated with maximum economic growth, and that what's good for the economy, and for individual corporations within it, is good for us.

5. How the Economy Works

6. Principles of Ecological Economics • The economy is an open subsystem of the natural environment, and also of society; thus, its healthy functioning depends on natural and social capital. • Nature, and also the economy, is subject to entropic decay. • Economic activity should be guided by ecocentric, as opposed to anthropocentric, principles, and should also aim at sustainably meeting basic human needs. • The scale of the economy is limited by the carrying capacity of ecosystems and the biosphere. • There are limits to which human and physical capital (ingenuity and technology) can substitute for natural capital. • Markets can achieve efficiency, but not necessarily achieve equity or optimal scale (throughput).

7. ‘Five Capitals’ Framework • Natural capital: renewable and non-renewable resources, waste sinks, and life-support processes. • Social capital: trust, reciprocity, and social organization (for instance, forms of civil society) that make business activity possible and life worth living. • Human capital: the energy, creativity, and mental, emotional, physical, and spiritual abilities that people bring to the economy and society, much of which is nourished in the family, social networks, and in schools and universities. • Physical (or manufactured) capital: factories, warehouses, stores, housing, consumer durables, infrastructure, etc. • Financial capital: the most paper assets from savings and investments that make production and consumption possible (see chart next page)

8. Financial Capital NOTE: In many cases financial capital is produced from exploiting the other four forms of capital, thus leading to their depletion.

9. Other Points • Different models of sustainability (“three-legged stool” vs. “egg” model) • Distinction between growth in biophysical throughout, growth in economic value, and growth in economic and social welfare, which should not be collapsed together. • Whether capitalism is potentially sustainable and adaptable to new requirements, and also the issue of whether corporations can be reformed or are inherently antithetical to the maintenance of natural and social capital • Debate on globalization and its positive and negative impacts • Possible alternatives to Gross Domestic Product (GDP) as a measure of social and economic well-being; also, the disconnect between happiness and growing income and material consumption.

10. Other Points • The discourse around the “death of environment-alism,” and the need for a new vision that addressespeople's gut-level concerns? • How to overcome the massive denial on the part of politicians and the general public? Thomas Homer-Dixon’s three kinds of denial – existential (as with climate change deniers), –consequential (it doesn't matter any way because I will die before the worst consequences are felt), or –fatalistic (there's nothing I can do about it – it's too big, too hopeless – so I may as well enjoy life as much as possible). • Why some past societies coped adroitly with crisis, and others sleepwalked into it. • Redefining security, and what we think we can afford to spend money on.

11. Other Points • Communitarianism, the social economy (formalvs. informaleconomy), and the role played by co-ops. • Good news stories: Emilio-Romagna (Italy), Mondragon (Spain), Grameen Bank (Bangladesh), housing co-ops (Canada), co-housing (Denmark and elsewhere), VanCity and caisse populaire (Canada), ethical investing (Upstream 21), more virtuous corporations (e.g. Interface Carpets), ShorebankPacific/ EcoTrust(USA), genuine wealth assessments of Leduc (AB), Santa Monica (CA), and Inuit communities, fair and direct trade, etc. • Various books and case studies (as discussed by you) for achieving optimization of the various forms of capital, while still enabling some level of prosperity and economic success. • Ultimately, the goal is to enable economic activity to benefit and enhance natural and social capital rather than to have it degrade and destroy them.